As the government launches its consultation on tackling late payment, Ben Jackson, chief executive at early payment provider, Oxygen Finance explains why regulation is only part of the solution.

There has been much rhetoric around tackling the UK’s endemic late payment culture, so it is encouraging to see this set of proposals – but regulation alone hasn’t worked so far and won’t effect much-needed future change.

Even with a non-executive board member to oversee such issues, suppliers are still left grappling with the choice to either suffer in silence or risk being perceived as biting the hand that feeds them.

To bring about change in any organisation, support right from the very top is a great start, but any board-level ‘sponsor’ should consider three further factors to propel an organisation forward:

  • An effective payment process that is designed to pay suppliers early or on time – not to hoard cash as we have seen in the past;
  • The appropriate use of widely available mature and proven technology to facilitate better payment practices;
  • An approach that commercially incentivises the buyer to pay its suppliers in a manner that eradicates financing charges in the supply chain, thereby reducing the price charged.