Thursday, 22 June 2017

The Victoria Small Business Commissioner




The 'Australian Model' for Helping Small Business Collect Payment from Customers



With its announcement of a 'Small Business Commissioner' in 2015, a post that has yet to be filled (the job is still open for applications if you're interested), the UK government is following a model that was pioneered in Australia.  How does the system work in Australia, and how successful has it been?

The first Small Business Commissioner in Australia was created in Victoria with the passing of the Small Business Commissioner Bill in 2003.  The Commissioner was to be dedicated to
promoting a fair and competitive market environment for small business.

The Victorian Small Business Commissioner (SBC)  lists its goals as:


  • promoting informed decision-making;
  • mediating business-business, business-government, retail tenancy, owner driver and forestry contractor, and farm debt disputes
  • investigating complaints about unfair market practices;
  • minimising disputes between small and large businesses.


Small businesses with an unpaid or disputed invoice can contact the SBC and request that it mediates between the two parties.   Mediation costs $195 per party per half day and is performed by qualified subcontract mediators.

The SBC has the power to issue a certificate to a party where the process has not been successful or where a party has refused to engage in the process.    Where a party has in the view of the Commissioner unreasonably refused to take part, details of the certificate may be published in the commissioner's annual report.  Hence there is a repetitional reason for businesses to positively engage with the process

In 2015-16 the Victorian SBC reports that it received nearly 2,000 cases of disputes.  Around 500 of these went to mediation, and 82% of these cases were resolved at mediation, without the need to progress to arbitration or litigation.

The success of the Victorian SBC has led to the establishment of Small Business Commissioners in New South Wales, Western Australia, South Australia and also nationally for Australia.

It remains to be seen how significant an impact on late payment, payment disputes and supply chain 'bullying' the UK Small Business Commissioner will have, but if the experience in Australia is anything to judge by, the sooner the government appoints the Commissioner and they can get on with the job, the better!

Thursday, 25 May 2017

The Conservative’s pledges on prompt payment

Since the post on Jeremy Corbyn's speech to the FSB, we have been going through the manifestos looking for information on what the parties might do to enforce or encourage prompt payment practices.

The Conservative manifesto says…

“we will use our buying power to ensure that big contractors comply with the Prompt Payment Code both on government contracts and in their work with others. If they do not do so, they will lose the right to bid for government contracts.”

That sounds like a commitment to lead by example and that a Conservative government would only deal with companies that play fair, but makes no promises on legislation or support for SMEs when their credit terms are abused. The Prompt Payment Code (http://www.promptpaymentcode.org.uk/) is administered by our trade body, The Chartered Institute of Credit Management, and gives companies confidence when dealing with its signatories that they won’t be unfairly treated. At My Credit Controllers we support and encourage people to sign up and abide by its terms, but as a voluntary scheme it would be good if there was a more effective ‘stick’ in law to beat those who wish to exploit SMEs.

Tuesday, 25 April 2017

Ready, steady….


In a speech to the Federation of Small Businesses last week, opposition leader Jeremy Corbyn pre-empted the announcement of a snap election by making some early policy pledges. Of particular interest to us at My Credit Controllers (MCC), Mr Corbyn highlighted the threat to small businesses caused by systematic late payment. He pointed the finger at large companies who were using credit with small suppliers as a means of funding their cashflow requirement, while at the same time threatening the very existence of those suppliers. Mr Corbyn said “Cash is king for any business, and big companies are managing their cash by borrowing – interest free - from their suppliers,” . Further adding that “It’s a national scandal. And it’s stopping businesses from growing and causing thousands to go bust every year. It kills jobs and holds back economic growth.”

He also said that some £26 billion is being withheld in late payments and that this contributes to the failure of 50,000 businesses each year. He goes on to promise that any company bidding for public sector contracts under a Labour government will be bound to pay its suppliers within 30 days. The party will also consult on a system of “binding arbitration” to resolve late payments disputes.


Here at MCC we support any move to legislate for fairness in paying suppliers according to agreed terms, but in the meantime it can always be a struggle to deal with these unfair and threatening practices. That was one of the main motivations for setting up MCC; helping SMEs get what is rightly theirs. Lets see what the other parties have to say on this issue in the run up to the June election.

Friday, 24 March 2017

Does the Late Payment of Commercial Debts Act Apply in Scotland?





Our article explaining how businesses have a legal right to add interest and compensation to unpaid invoices is one of the most visited pages on the My Credit Controllers website.

Recently we received an enquiry asking whether the legislation applies the same way in Scotland as it does in England and Wales.

The simple answer is 'yes' - the interest rate you can apply, the compensation payment and the ability to add 'reasonable recovery costs' are just the same in Scotland as elsewhere in the UK.

You can check this yourself using the legislation.gov.uk website.

The original legislation that applies is the Late Payment of Commercial Debts (Interest) Act 1998. This law was first created in 1998 by the government in Westminster, but has been amended over the years - in 2002, 2013 and 2015.

Amendments from 2002 onwards were made separately by the UK parliament and by the Scottish Government, but it seems that the amendments were coordinated so that the legislation in effect remained the same both north and south of the border.

If you open up the latest version (revised), and tick the 'Show Geographical Extent' check-box on the left side of the page you'll see at the top of the page that the legislation applies in all the devolved regions of the UK.  The image below shows the marked up page with the geographical extent shown and notes to show which parts have been amended by subsequent regulation.



So, yes, adding interest to overdue commercial invoices works just the same in Scotland, so get on over to our late payment interest calculator to work out how much interest and compensation you should add.


Thursday, 23 March 2017

Welcome to the My Credit Controllers Blog

We will be writing blogs on issues relating to getting paid on time by your customers, government policy in this area, and best practice on how to manage your cash flow and...well anything that interests us.

We hope you enjoy it.  Please check back!

The My Credit Controllers team.