New support has been offered to small business owners struggling with the stress caused by late or unpaid invoices, as new guidance has been introduced to address the impact of cash flow pressures on mental health.
Just in time for Time to Talk Day, the Office of the Small Business Commissioner (OSBC) has released new online guides designed to help SMEs and freelancers access psychological support while giving them practical steps to tackle late payment problems.
Late payments are typically presented as a financial problem, but there is increasing evidence that it can also have a significant impact on well-being. For many business owners, the uncertainty of when they will be paid can cause ongoing anxiety about covering overhead costs, paying staff and the profitability of their business.
The new guidelines bring together business-focused advice and trusted mental health resources in one place, providing support for owners who may be feeling overwhelmed. It also outlines practical steps SMEs can take when unpaid invoices begin to affect their financial stability and mental health.
The resource was developed in conjunction with a study by Leapers that examined the connection between financial stress and mental health among small business owners and freelancers.
Emma Jones, Small Business Commissioner (pictured), said running a business can be mentally taxing, particularly when there are late payments. She said it’s important for freelancers and small business owners to know where to turn for support and to feel empowered to ask for help.
“I founded a small business support platform and network before becoming Small Business Commissioner and have seen the profound and positive impact that occurs when freelancers join a community of like-minded colleagues,” said Jones. “At the Office of the Small Business Commissioner, we are committed to doing our part, with a focus on addressing and combating late payments, so that those who become self-employed can reap the full benefits of self-employment.”
But some industry representatives warn that support alone will not solve the underlying problem.
Stephen Carter, director of payments strategy at Ivalua, said the guidance was right as it recognized the mental health impact of late payments, but argued the government needed to go further.
“UK SMEs don’t just need psychological support to cope with late payments. They need legislation and enforcement to prevent delays in the first place,” he said. “Delayed payments are not an unavoidable fact; they are a failure of corporate governance, accountability and outdated payment processes.”
Carter added that late payments are often due to poor internal controls in large organizations, including fragmented procurement and financial systems, manual processes and a lack of visibility into supplier obligations. He warned that the consequences could be serious, disrupting supply chains and marginalizing smaller suppliers.
Research cited by Ivalua suggests that more than a third of UK companies abandoned suppliers due to cost pressures caused by late payments.
Carter called on the government to immediately publish its response to last year’s consultation on late payments, warning that continued inaction risks sending a message to larger organizations that poor payment practices will be tolerated, while leaving SMEs to bear the financial and emotional burden.
