The plan has been developed to help prevent late payments from impacting too severely on small and medium businesses where cash flow is sensitive to disruption.
Action to be taken includes extending payment performance reporting obligations, introduced in 2017, adding requirements for businesses to report the value of invoices and the number of disputed invoices.
Secretary of state for business and trade Kemi Badenoch said: “SMEs make up 99% of the firms in the UK and are the lifeblood of our economy. I know late payments are a massive barrier to growth and I am determined to fix that.
“The measures we’re announcing will take a big step towards making sure SMEs get their payments on time, helping firms to grow and prosper.”
The government will also provide more advice to small businesses on negotiating payment terms that suit them, and how transferring to a digital invoicing system can help them get paid more quickly.
The Small Business Commissioner, an independent body set up in 2016 to tackle late payment, will likewise receive a wider remit from the government to undertake investigations and publish reports stemming from anonymous tip-offs, though these increased powers will have to be granted by parliament.
The government claimed that improving the UK’s payment culture could boost the economy by £2.5bn annually.
Charles Jarrold, CEO of the BPIF, said he was glad to see the government acknowledge the difficulties late payments can present small businesses, but was unsure of how useful the measures would be.
He told Printweek: "Late and slow payment remain a real problem in the sector, and across the economy as a whole, both impacting cashflow and increasing the risks of bad debts.
"We responded forcefully to the consultation that the government carried out, supporting improved reporting requirements, but also asking for real effective changes in legislation.
"While we are encouraged that government recognise that this is a problem in the UK economy, and have taken some action, just strengthening reporting requirements isn’t likely to change the situation. We need to see changes in legislation to reduce payment terms, to address this once and for all."
Dominic Hartley, commercial director at Newport commercial printer Lexon Group, told Printweek he was likewise sceptical of the measures' ability to change UK payment culture.
He said: “We get letters on a regular basis from clients, asking to change their payment terms, from 60 days to 90, or 90 to 120 – so it seems to be going in the opposite direction.
“We negotiate terms as part of any contract. And the government has been putting pressure on councils to improve their payment terms over the past few years, and they have all got pretty good.
“It’s the bigger print management companies, really, which try to string [payment] out longer and longer. And some of them are so large that they just don’t seem to be able to efficiently process the invoices.”
He added that many printers had already learned to deal with late payers in their own way.
“This is nothing to get too excited about, it’s just more admin for us,” he said.
“Individual business owners have their own methods, well developed over time, for ensuring that payments are made properly – and all the systems are in place, even before you go to small claims court. Traditionally, you’d put customers on stop, or negotiate payment in advance.”
