To wrap up this series, we're supporting the Small Business Commissioner in their work to improve laws around poor payment behaviours from businesses to freelancers. Have your say.
Even the 45 days proposal is unnecessarily long. There is no reason why payments can't be made in 14 days or less. If a client hasn't got the money to pay for a service or product, they shouldn't be placing the order. I work with a multinational client in mainland Europe and my contracted terms are 10 days. They hit it every month, no issues.
In freelancing, I agree. However, the laws affect many longer and more complex supply chain businesses too, where enforced shorter payment terms favour much larger businesses as a suppliers, risking smaller independent businesses being pushed out. So it's about designing rules which don't adversely impact small businesses too. It's complex, but the main benefit here is prevent unfair contract terms. As you say, there's nothing preventing a business with good cashflow to pay long before the due date. And if they can't afford to hire, they shouldn't be engaging a supplier.
Even the 45 days proposal is unnecessarily long. There is no reason why payments can't be made in 14 days or less. If a client hasn't got the money to pay for a service or product, they shouldn't be placing the order. I work with a multinational client in mainland Europe and my contracted terms are 10 days. They hit it every month, no issues.
In freelancing, I agree. However, the laws affect many longer and more complex supply chain businesses too, where enforced shorter payment terms favour much larger businesses as a suppliers, risking smaller independent businesses being pushed out. So it's about designing rules which don't adversely impact small businesses too. It's complex, but the main benefit here is prevent unfair contract terms. As you say, there's nothing preventing a business with good cashflow to pay long before the due date. And if they can't afford to hire, they shouldn't be engaging a supplier.