The Association for Chartered Certified Accountants (ACCA) is calling for action to tackle the effects of poor payment practices on SMEs.
Late payments have a domino effect on supply chains and negatively impact cashflow, resulting in "severe consequences" for small businesses and negatively impacting the UK economy.
The accounting body is recommending several measures including increasing the integrity of supply chain reporting, providing more information to SMEs and enhancing the role of the Small Business Commissioner (SBC).
The SBC works with small firms and their larger business customers to help resolve disputes over unpaid invoices. Extending the commissioner's powers may allow the office to instigate investigations instead of relying on individual SMEs to make complaints.
Accountants also have a "critical" role to play in promoting good business practices to minimise late payments.
Responding to a recent consultation by the Department for Business and Trade, a spokesperson from ACCA said:
"Improving poor payment practices in the UK requires change on a number of fronts, including changes in culture, improving awareness and enabling scrutiny, as well as legislative change.
"We recognise that this will take time and, given the particular challenges reaching small businesses, it is probably too early for the full effect of some measures to be felt."
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