For retailers, cash flow matters. Whether you are an independent shop supplying goods to a larger business, an online retailer working through marketplaces, or a larger retail business managing a complex supplier base, getting payment practices right is fundamental to healthy trading relationships. 

The Office of the Small Business Commissioner (OSBC) is an independent public body established by government under the Enterprise Act 2016 to tackle late payment and unfavourable payment practices in the private sector. Its mission is to make life easier for small businesses by getting money moving through the economy, while working with larger organisations to improve the way they pay their suppliers.  

Late payment remains a significant issue across the UK economy. Research commissioned by the UK government and the OSBC estimates that late payments cost the economy almost £11 billion each year. Around 1.5 million businesses are affected annually, with an estimated £26 billion owed in late payments at any given time. Businesses affected also spend an average of 86 hours a year chasing overdue money, taking owners and employees away from productive work.  

Helping small retailers get paid 

One of the Small Business Commissioner’s most direct roles is helping small businesses resolve payment disputes with larger customers. The OSBC defines a small business as having fewer than 50 employees and a larger business as having more than 50. Where a small retailer has unsuccessfully tried to resolve an outstanding payment with a larger customer, it can approach the OSBC for information and support. The Office may be able to investigate the dispute and make recommendations to help resolve it.  

This support can have a tangible impact. The OSBC has helped get over £10 million in overdue invoices paid to small businesses since it was established, and over £1 million so far this financial year alone.  

For a small retailer or retail supplier, an unpaid invoice can mean more than an administrative headache. Money tied up with a customer is money that cannot be used for wages, rent, stock or investment to grow. The OSBC provides businesses with another route to pursue a resolution when their own attempts have not worked. 

Helping retailers prevent problems 

The Small Business Commissioner is not only there when something goes wrong. A substantial part of its work is designed to help businesses avoid payment problems in the first place. 

Its free guidance covers contracts, getting invoices right, unpaid invoices, negotiating terms and conditions, e-invoicing, online marketplaces and legal action. It also has an interest calculator to help businesses calculate the interest and compensation that can be charged on invoices paid late or remaining unpaid beyond agreed terms.  

For retailers, simple disciplines can make a difference. OSBC guidance recommends researching businesses before trading with them, agreeing a clear written contract and making sure invoices contain accurate information and reach the correct recipient. Larger businesses' published payment-performance information can also help businesses understand how their prospective customers pay suppliers.  

Improving payment culture across retail supply chains 

The Small Business Commissioner also works on the other side of the relationship by encouraging businesses to improve their payment practices. 

A central part of this work is the Fair Payment Code. The Code recognises businesses adhering to good payment practice and provides a directory that smaller suppliers can use when researching potential customers. This is particularly relevant to retail, where relationships between businesses of very different sizes can form part of the same supply chain. 

Fair payment is not simply about avoiding disputes. Better payment practices give suppliers greater certainty, strengthen commercial relationships and help create healthier supply chains. 

A changing landscape for payments 

The environment is also evolving. The Commercial Payments (Late Payments) Bill currently progressing through Parliament proposes significant changes, including a maximum 60-day payment term for large businesses paying smaller suppliers, mandatory interest on late payments and stronger powers for the Small Business Commissioner to investigate poor payment practices and adjudicate disputes.  

For retailers of all sizes, the message is therefore straightforward. Good payment practice is becoming an increasingly important part of doing business. The Small Business Commissioner can help when things go wrong and champion best practice when things go right.

If you want to hear more about the Small Business Commissioner, you can visit their website: https://www.smallbusinesscommissioner.gov.uk/