Conservatives Targeting Small Businesses

The Tories have come under a lot of scrutiny throughout their electoral campaign for being a party more concerned with pandering to the needs of big business than supporting the country's 5.2 million small to medium enterprises.

However, David Cameron last week set out plans to change that, with the needs of SMEs - from faster payment of suppliers, better broadband access and business rate reductions - in a manifesto for small business.

The question now - is the Prime Minister just blowing more hot smoke in order to win our favour? What we need to see is affirmative action being taken and a clearly set out road map to achieving all that was promised.

Late payment has been a major thorn in the side of SMEs for years now, and little has been done by the Government to affect it.

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While we applaud the government for their forward thinking to help small business growth with a veritable plethora of ideas for small business growth, it all comes down to action. Having a plan and putting a plan into operation are two very separate matters.

In an ideal world everybody would pay for what they buy at the time they buy - isn’t that what happens at Marks & Spencer’s et al? M&S doesn’t say “here take the goods on net 30 day terms.” No, it is cash now - if the consumer chooses to finance that purchase with a credit card that’s their option. The point being that the supplier has immediate payment and can use that to grow their business.

Well, that is the ideal world and it’s not likely to materialise in the business sector anytime soon.

However, if companies would simply honour the terms of payment - albeit with a little push from Government - it would be a start. That would also still leave suppliers with an option for ‘cash on delivery’, giving even faster growth through mechanisms such as spot factoring or single invoice discounting.

Sadly, to date, any attempts to reign in late payments and excessive payment terms have come to very little.

It’s already been revealed that a number of signatories to the Prompt Payment Code have failed to meet the standards set out by the Chartered Institute of Credit Management (CICM) and existing penalties have done little to deter big business from missing payment due dates. It will be interesting to see, should the Tories be re-elected - if they’ll put their money where their mouths are.