The Small Business Protections (Late Payments) Bill has been introduced to parliament, promising a 60-day payment cap, mandatory 8% interest on late payments, and new enforcement processes. Sebastien Marchon, CEO of global fintech Rydoo, holds the view that prevention of late payments will be more effective than imposing fines.
He calls for greater use of automation within finance departments to make invoice processing and approval almost immediate, protecting supplier relationships and reducing the £11bn late payments problem. Sebastien argues that as payment performance becomes more visible with regulation, firms are likely to boost uptake of automation tools to ensure they don’t fall foul and owe penalties.
Sebastien Marchon commented: “The Small Business Protections Bill is a welcome step for UK companies struggling due to late payments. However, in addition to guardrails like mandatory payment terms and penalties included in legislation, we need to see a greater level of automation within finance departments to help to reduce late payments.
“Manual invoice processing and approval workflows are where payment delays actually happen, so we need to start thinking about prevention rather than a cure for this £11 billion problem. The 38 small firms closing every day due to cash flow problems need suppliers who pay on time, not suppliers who eventually pay fines. Automation can make invoice processing and approvals almost immediate, creating predictable payment cycles that protect supplier relationships and minimise the reputational damage of late payments.
“In a market where payment performance will soon be highly visible, automation can help to ensure that firms do not fall foul of new laws and remain competitive.”
Rydoo provides expense management and accounts payable automation software to clients including Deloitte, Miele and Swiss.