The King’s Speech and Late Payments. Why this matters more than ever for UK businesses

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For years, late payment has been treated as an unfortunate inconvenience for businesses.

Something to tolerate.
Something to work around.
Something businesses were simply expected to absorb.

But for many SMEs, late payment is not an inconvenience at all. It is one of the biggest threats to cash flow, stability and growth.

This week’s King’s Speech signalled what could become one of the biggest shifts in payment culture the UK has seen in years, with the government outlining plans aimed at tackling persistent late payment and strengthening protections for smaller businesses. ()

The proposed measures include:

• Stronger powers for the Small Business Commissioner
• Mandatory interest on overdue invoices
• Potential caps on payment terms
• Financial penalties for persistent late payers

The reality is these changes are long overdue.

Late payments continue to damage thousands of businesses across the UK every year. Current estimates suggest late payment costs the UK economy billions annually and contributes to businesses closing their doors every single day.

What often gets overlooked is the human impact behind those figures.

Business owners delaying their own salaries.
Teams under pressure because cash flow is tight.
Hours wasted chasing invoices instead of focusing on growth.

At Pecunia, we work with businesses every day that are feeling exactly this pressure.

That is why we are passionate about helping businesses strengthen their credit management processes before problems escalate.

A Credit Management Audit can often uncover issues businesses do not realise are affecting their cash flow, including:

• Weak onboarding and credit checking
• Poor payment term controls
• Inconsistent collection processes
• Lack of escalation procedures
• Gaps in communication between sales and finance

Even small changes can have a significant impact on debtor days and overall cash flow.

We also understand that many businesses need experienced support but are not in a position to recruit a full-time senior credit professional.  This is where a Fractional Credit Manager can provide real value.

Having experienced credit leadership, even on a part-time basis, can help businesses implement structure, improve collections, reduce aged debt and create healthier working capital without the overhead of another permanent senior hire.

The government’s proposals are encouraging.  They send an important message that paying suppliers properly and on time matters, but legislation alone will not solve the problem overnight.

Good credit management remains essential.

Businesses that proactively strengthen their processes now will always be in a stronger position, regardless of what legislation comes next.

At Pecunia, we believe businesses deserve to be paid fairly, professionally and on time.

♦ Not eventually.
♦ Not after endless chasing.
♦ On time.

Because healthy cash flow supports healthy businesses, and healthy businesses support the wider economy.