There is no doubt that the COVID-19 pandemic is unmatched in modern times. It’s had a significant impact on the global economy as well as people’s health and livelihoods. Measures put in place by government to try and protect businesses had far-reaching effects but as we move on to the recovery stage, the pressures individual businesses face are going to be tougher than the lockdown period itself.
Cashflow is going to be King, Emperor and President and when the availability of credit diminishes, government support schemes taper off and loans/deferrals become payable, small businesses will either prosper or flounder. This is why big businesses must step up and recognise the value of their smaller suppliers providing flexibility, speed of supply, innovation and creativity.
Prompt payment practice is one of the most important factors that will enable the UK economy to recover quickly after the pandemic. The payment of invoices is an articulation of the relationship, and businesses that pay their small suppliers promptly also tend to treat them better in other respects too and recognise them as partners.
There needs to be a shift from a one-dimensional transactional mindset to a dual-dimensional emotional and commercial one by acknowledging the human element in all business relationships because late payment doesn’t just hurt small businesses and their owners financially, it also impacts on their well-being and mental health.
As we come out of COVID-19 honest and open conversations are going to be more important than ever. Companies must operate with transparency and timely communications and there is going to be a need for the whole business community to recognise that we’re all in this together and to work in a spirit of collaboration rather than confrontation.
The COVID-19 pandemic was impossible to predict but as we move from crisis management companies need to make decisions and take action with recovery in mind and have the resilience and agility to reshape their business strategy to thrive in the future.
Small Businesses also need to be more willing to ask for help and that’s why services like the SBC exist. My Office has a 100% success rate in collecting payment for in-scope complaints and has collected over £7.3m to date. I urge all small businesses that have outstanding invoices to contact my office, we provide a free service and can help make a difference through this difficult time.