Here are some of the questions we get asked most often. We hope the answers may be useful.

Payment terms and conditions are used to agree when goods and services will be paid for. In many business transactions goods and services are supplied by the supplier and paid for later. This is known as Trade Credit; the supplier gives the customer credit.

Payment terms set out when the bill or invoice for those goods and services must be settled. The payment term begins at the point that the invoice has been received and accepted. If payment isn’t received on the agreed date, or before that date, the payment is late. In that case late payment charges can be applied.


If the goods and services are procured by a public sector body, payments should be made within 30 days of that body receiving and accepting the invoice.

Where goods and services are procured by a private sector business, payment terms are usually agreed in advance, by the supplier and the customer. Usually, the payment date shouldn’t be longer than 60 days from the date the invoice is received.

However, the supplier and the customer can agree longer payment terms, as long as the longer payment terms are mutually agreeable and not grossly unfair on either the supplier or the customer. If payment terms aren’t agreed in advance, by the supplier and the customer, or where goods/ services have been supplied using trade credit, payment must be made within 30 days from when the invoice is received and accepted.

Covid-19 has caused financial problems and challenges for businesses of all sizes. The smallest businesses are being affected most.

If you are finding yourself short of cash and not able to pay your suppliers, we would recommend talking to them as soon as possible and trying to find a way to work together to manage the situation. If you can’t pay on time your supplier may get into financial difficulty too. The impact of one firm not being paid can have a domino affect all along the supply chain.

Speak to your bank. They may be able to suggest options to give you the cash you need to pay your bills and manage your cashflow. The Business Support Helpline may be able to offer information on other financing options.

Check your own accounts to see whether you are owed any money that you could collect from your customers and contact them too. Contact us at the OSBC for advice if you’re in dispute about payments you’re owned.

Talk to them. In our experience small businesses often don’t negotiate with their bigger customers and simply accept delays and extended payment terms. Payment departments in bigger firms don’t always understand the impact not being paid one invoice can have. If you can’t resolve the dispute talk to us.

Payment terms shouldn’t be extended to longer than 60 days unless you agree, and the revised contract terms are not grossly unfair to you.

If you can’t reach an agreement that is acceptable contact us at the OSBC and we will investigate, and with you and your customer to make recommendations and resolve the dispute.

Where you have attempted to resolve the outstanding debt yourself without success you can contact us at the OSBC for information and support. We may be able to investigate the dispute and make recommendations to resolve the matter. If we can’t investigate your dispute, we will do as much as we can to help you resolve the situation.

There is no charge. We’re HM government. Support, information and our complaint scheme is free and available to all small businesses with fewer than 50 employees.

We count any firm with fewer than 50 employees as a small business.

A large business in defined as a business with more than 50 employees.

Yes. The Enterprise Act 2016 which supports the appointment of the Small Business Commissioner states that complaints can only be investigated if the dispute is made by a small business against a large business.

However, where if we can’t investigate a complaint, we will do as much as we can to give you the information and support to resolve the dispute yourself or to point you to another organisation that can help. Often just knowing that we are supporting you is enough to make bigger firms pay what they owe.

If the outcome of an official complaint investigation reveals poor payment practice, the Commissioner can publish a report highlighting details of the complaint. We may also name the businesses involved. Reports can be viewed here.

Poor payment practices include late payment where the invoice is overdue. Not paying at all is also poor practice. Other examples are:

  • Payment terms that are grossly unfair or set longer than 60 days without mutual agreement
  • Compulsory discounting or promotional charges without consultation
  • Contractually stipulated deviations to late payment remedies that do not provide adequate redress
  • Excessive delays in resolving invoice dispute.

Yes, the dispute must be specifically related to late payment, or non-payment. Disputes regarding quality, timeliness or contractual agreements are outside the scope of the Enterprise Act 2016. However, the Small Business Commissioner does provide signposting and information about alternative ways to resolve the dispute. We can also facilitate structured conversations between you and your customer if that’s agreeable to you both. This approach often achieves results.

We are not qualified to provide legal advice and contracts are legal documents. However, we do provide general support and information about payment terms and conditions, and the impact they may have on a business. You will need independent legal advice if you have concerns or disagreements about a contract. You can search for a legal adviser, solicitor or barrister here.

The Small Business Commissioner can only investigate disputes between small and large businesses. If your dispute is with another small business, we will give you support and signpost you to other appropriate dispute resolution services. If you and the other small business are agreeable, we can set up informal conversations between you in the hope that you can reach a mutually acceptable solution.

No. Complaints from the construction sector or work undertaken under the Housing Grants, Construction and Regeneration Act 1996, are outside the remit of the Small Business Commissioner. “The Construction Act” sets out a legally defined dispute resolution system with legally binding independent adjudication. We will continue to support you and signpost you to alternative methods of resolution for construction sector firms.

The Small Business Commissioner can only investigate disputes between businesses in the private sector. Disputes with public sector bodies are investigated by the Public Procurement Review Service (PPRS).

The value of an invoice, or the reason an invoice has been submitted, can be disputed legitimately. If this is the case get in touch with the creditor as soon as possible. There is no legally defined period that an invoice can be in dispute for, but all businesses involved must take all reasonable steps to resolve the dispute as soon as possible. Where a creditor considers that either the dispute, or the time taken to resolve the dispute, is not reasonable, you can contact us at the OSBC and we may be able to investigate. There’s information on how to prevent unnecessary delays and disputes here.

We can only investigate complaints about businesses where they have some form of UK presence, for example an office or factory in the UK (United Kingdom). We can’t investigate complaints about businesses that have no UK operation or are based entirely overseas. However, we can give you information about chasing debts unpaid by overseas businesses.

A payment is late after an invoice has been issued and accepted, but payment has not been paid within the agreed payment terms. If there are no agreed payment terms a payment is late if an invoice has been issued and accepted but payment hasn’t been received within 30 days.

The Late Payment of Commercial Debts Act and subsequent amendments to that Act, allow creditors to charge interest and compensation on late paid debts at statutory levels where an invoice has not been paid within the agreed payment terms. Statutory remedies for late payment can be varied in a contractual agreement, but the contractual remedy for late payment should still be significant and broadly equivalent to statutory levels.

Use the interest calculator tool on our website to work out how much interest and compensation to charge on your unpaid invoice.

You can’t claim interest or compensation for an invoice that has been disputed, legitimately, by a debtor. Late payment charges can be applied if an invoice has been accepted, but payment has not been made within the agreed payment times. The payments term begins at the point that the invoice has been received and accepted. If you think the dispute is unreasonable or that it has taken an unreasonable amount of time to resolve it, we may be able to investigate your complaint and make recommendations to resolve the dispute.

Most businesses act positively, responsibly and will actively engage to find a satisfactory resolution to a dispute. We at the OSBC aim to resolve disputes amicably and protect the trading relationship between businesses. However, if you are worried about identifying yourself as the business making the complaint, we can handle the dispute confidentially and protect your identity. That approach may limit the chances of getting the dispute resolved as it may reduce the level of action we can take. Talk to us and we can agree a course of action.