Late payments have long been one of the biggest frustrations for small businesses. They cost jobs. They force healthy businesses to close. They stop businesses from meeting their own commitments, like paying their people. They cause any number of sleepless nights and serious mental health consequences as people running small businesses are forced to juggle to make ends meet.
Xero has been campaigning for years to end this problem. Now we are asking you, the people directly affected by poor payment times to put your name to that campaign too.
The truth is that late payments shouldn’t happen. All anyone’s asking is to be paid the money they’ve already earned. The problem has been around for so long that it’s become part of the woodwork. The temptation is to believe that nothing will ever change.
But that’s not how we see it. For several years, we and many others in the industry have been pushing Governments to do more about it. Most recently, at the end of last year we launched our manifesto for small businesses in the Houses of Parliament.
At last, politicians may have started to take notice of this collective effort. We want our business customers, and others, to help push for change by signing our open letter.
The Labour Party has said that it will force big businesses to outline their late payment performance in their annual reports. The Conservative Government is currently undertaking a public consultation to look at what it might do to fix the problem.
We don’t think what they are talking about will go anywhere near far enough. That’s why we are organising an open letter to send to policy makers, to push for what we think is needed to make a difference.
We hope you will join others and add your weight to the arguments by signing the letter too.
Big businesses wouldn’t dream of paying their employees late, so why do they think it’s alright not to pay their suppliers at the agreed time?
To fix this problem, we think it needs a change of language and culture. Late payments should be called what they are: “unapproved debt”.
We are talking about money that small businesses have earned, and which very often big businesses are holding onto without any moral claim on it.
Xero’s research shows that when thinking of late payments as “unapproved debt”, 81{1652eb1ffa4184925f6a63a9c04ea6b421acb7a78117241e7d4325cdca8339fa} of large companies would be more likely to pay their suppliers in a timely fashion.
Please help us demonstrate how important this issue is, and what’s needed to fix it. Sign our open letter.