I'd like to apologise to all my fellow freelancers

I recently had an invitation to meet with the Government's Small Business Commissioner, after I was recognised by the new national Fair Payment Code as being the UK's first freelancer to gain this certification (and at the top gold level too!).

I'd already worked with their office to help them review and adapt their application criteria for this standard, (which originally excluded most of us freelance/self-employed types from being able to apply - because most of us don't have accountants, or use expensive accounting software), so that we could be on a slightly leveler playing field as everyone else. And this additional 'going beyond' made me think that the Commissioner might be especially interested in my ideas and experiences? (hence the invitation).

This invitation seemed a good opportunity for to me to help government bodies better understand just how important we are to the wider economy (and maybe a little more deserving of recognition in its policy?), if for no other reason than because I know from most of my conversations with a lot of my peers over the years, that we're actually much better than larger private businesses at paying our suppliers on time.

But as an unpaid carer, I had to decline the invitation - the Commissioner's office said I'd have to travel all the way into central London to meet with them in person: I live way 'up north', so the time needed for the travel wasn't possible against my ongoing caring responsibilities (which ironically, I'm not eligible for any support with, because government policy doesn't recognise that freelancers can also be carers). Despite offering to meet by zoom, or enter in an email dialogue, they simply said "sorry you can't take up the invitation, but keep up all the good work you're doing as an unpaid carer".

So to all my fellow freelancers out there - I'm sorry I wasn't able to represent us to government when I had a clear opportunity to. 

But hopefully more of us will start to submit ourselves to be certificated by the Fair Payment Code now that the application process allows us to, and the subsequent number of us doing so against other types of businesses might prompt the Commissioner to invite some of us round for tea and biscuits in the future, to re-start the conversation that I wasn't able to?  

Why I really signed up to the Fair Payment Code

Earlier this year I became one of the first businesses in the UK (and the first sole trader) to be certificated by the new Fair Payment Code (and at the top tier level, too!). 

This new standard is part of the government's wider attempts and efforts to encourage business growth, investment, etc by helping to make sure money is flowing around our economy in ways that benefit all of us (and isn't getting 'stuck' in the pockets of a few bigger businesses, at the expenses of the lots and lots of small businesses who collectively employ most people).

Over the first few months since the Code (and its first cohort of pioneer awardees) was officially launched, I've seen lots of my fellow certificated businesses share the reasons why they chose to submit themselves to the rigour and scrutiny that the application process for it entails.  Most of these are probably what you'd expect:

- it helps them build more resilient supply chains;

- it makes them more trustworthy with commissioners, investors, etc

- and it helps them better attract talent when they're recruiting, by showing how they're a firm you wouldn't be embarrassed to work for.

However, as you might expect, my motivations were a little different: 

I've always been open in stating my intention to pay all invoices within 24 hours of my receiving them, which has led to my current recognition by the Organisation for Responsible Businesses; the Good Business Charter; PayOnTime; and the previous government Prompt Payment Code.

And that's because ultimately I don't want to be a d*ck - I hate it when I'm paid late by my clients, so why would I further their bad practices by making others similarly suffer when I could do something about it?

I also saw lots of the other big businesses alongside me on the initial list of awardees patting themselves on the back for getting the bronze and silver levels of certification (which means they pay up to 90 days after you give them your bill). But if I can hit gold (guaranteed paying within 30 days) without having dedicated finance managers, access to investment and bank loans, etc in the way they have, then how come my practices are somehow so much better than theirs?

What's stopping bigger businesses from hoarding cash, which not only causes more smaller firms like ours to increase the risk of going bust, but also contributes to likelihood of the wider economy going into a recession, which would hurt all of us?

* recessions aren't caused by an economy running out of money, but by people and businesses stopping spending money in it - like not paying their bills when they're supposed to...

Winning gold (for getting money out of my business the quickest)

I've recently been named as one of the first businesses in the UK economy to be recognised under the Government’s flagship Fair Payment Code - a new standard that aims to challenge practices of late payment, which see small businesses currently losing nearly £2bn each year that they could otherwise be investing for growth, new job creation, etc[1]. 

And to make this recognition it even more special, I'm not only the only sole trader/freelancer to make the list, but I've also been given the gold-level badge, too! 

Given that the code awards businesses against three levels (bronze, silver, and gold), and I'm tiny compared to all the others recognised by it, it's probably safe to say that there's some red faces amongst them - if I can achieve this top level standard ahead of them, without the resources of their finance departments, access to lines of credit, etc, then what’s stopping them from doing the same?

I've always aimed to pay all invoices I receive within 24 hours – not just because I know how important it is to me as a micro enterprise to be paid promptly, but also because late payment practices force too many businesses to be wound up before their time. In turn, this means their plans to continue to grow our wider shared economy are lost; and people’s livelihoods are destroyed, forcing more families into poverty. And I can’t sleep with my conscience if I’m not doing all I can to avoid contributing to this problem.

In the past, my payment practices have been recognised by the Organisation of Responsible Business, the Good Business Charter, the previous Prompt Payment Code, and my being a registered Pay On Time supporter. This latest recognition highlights not just my own professional standards and commitments to fellow businesses of all types, but also the importance of micro enterprises and the self-employed like me, who are quietly and collectively working to strengthen our wider economy for the benefit of us all.

For more about the new Fair Payment Code -https://www.smallbusinesscommissioner.gov.uk/new-fair-payment-code/

---

[1] https://elitebusinessmagazine.co.uk/finance/item/how-are-we-still-talking-about-late-payments

A question of grace and bad debt...

I've recently published my 13th annual social impact report on myself - and as with previous years, continued to 'evolve' the framework by adding further indicators (specifically, in relation to how far I'm adopting working practices that reduce environmental impact). 

The framework I've developed is overall designed to reflect my values, but I'm wondering how far I should include additional indicators relating to 'grace', and more specifically, 'forgiveness'...

You see, businesses of all types will, at some point, face the prospect of having to deal with bad debt - a customer or client that either refuses to pay, or whose venture has become insolvent. In such circumstances, conventional wisdom decrees that we (as the people the debt is owed to) enact recovery processes: debt collection agencies, applications for court orders, striking them off our Christmas card lists, and such like. 

But sometimes, the people we've worked to support and now can't make good on the payments we've agreed, haven't made a conscious or deliberate choice to run their businesses into the ground, or to happily walk away from their dreams and ambitions with little care for the consequences. They're just as, if not more, upset than we are that circumstances have played out as they have and are simply trying to minimise the fall out (albeit that usually means by 'doing an ostrich' and hoping it all goes away by itself...).

In such instances, grace would seem to require that we at least consider the option of forgiving them their debt - not as a 'carry on and mess up other businesses' type approach, but rather as a measured and reflective conversation about how working relationships have been bruised, and helping all involved understand the cost that such a forgiveness of debt will entail (but the benefits it could also offer in the longer-term to all concerned as well). 

As a sole trader, my experiences of exercising grace in this way is 'quite painful' as I've no larger company or wider team of colleagues to help soften the hit of not now receiving the income I'd anticipated. I also need to work at least doubly hard to find additional work to replace the earnings I've lost and budgeted to receive, (earnings that help sustain my family, home, and other commitments).

So the question I'm grappling with is - when I exercise grace in this way, should I record and report it, as I do with other workings out of this value (such as the extent to which I currently report on the pro bono support I've given to various people and groups).

Would such open reporting simply encourage a culture of clients 'crying off' when they see that I'd be willing to forgive them their debt, or would it mean we can all start to have more grown-up and mature adult conversations about money, and the way in which we recognise and have responsibility for others through ensuring that we pay them what we owe?

what I'm doing to help fix a £14.9bn problem that's killing our economy...

There's a problem in the wider business community that's affecting everyone (and our livelihoods), and it's getting worse every year.

It's a problem that people struggle to feel able to talk about or openly challenge.

And it's a problem that's increasing the risk of pushing us back into recession, and leading to further business closures and job losses than we're already seeing and hearing about in the media.

And it's not red tape or (mental) health - it's money. More specifically, the challenge of late payment: customers who commission us to deliver work and goods for them, and then suddenly get out the big book of excuses when it comes to paying us what was agreed, so that they can hold onto the money that's rightly ours for longer.

It disproportionately hits small businesses and the self employed like me, as we don't have big financial reserves to cash flow the work, or employ finance teams who can chase up the money on our behalf (we have to take time out of earning from other work to do that ourselves). We also can't easily use the courts to chase the money, as that costs more cash and time to pursue, and also risks damaging our public reputation.

Late payment is also stifling the wider economy - most small businesses now don't feel that they can raise the money they need to invest in their growth and maintaining their competitiveness because late payment is causing problems for their cash-flow (which makes it harder to repay any loans), and they're having to take out more time to chase customers, rather than deliver more paying work elsewhere (further reducing their cash in, and profitability). And such declines in economic activity, production, and employment are often cited as causes of recession...

And when the cash runs out for us because we've not been paid the money we're owed - it's game over. Our enterprises fold, and we lose our livelihoods along with anyone we're employing. And for what reason? So that some larger corporate can hold onto the cash (which they already have plenty of) for a little longer.

Sadly it's not just big bad private businesses who are guilty of this. Government and the public sector are amongst amongst the worst offenders for not paying on time; and some of my work with charities and social enterprises has also seen this sector being guilty of not paying when bills fall due as well...

It's currently a £14.9bn problem, with the typical small business owed £11,000 and spending nearly a day a week trying to get the money paid that they're owed.

£14.9bn seems an overwhelming amount that nothing can surely be done about. Government have created a post of late payment commissioner to help change this culture, but they've had little (if any?) impact.

So what can a sole trader like me do about it? Well, I can make a pubic commitment to always and openly paying my suppliers on time (if not early) through being certified as a 'Pay On Time' supporter.

I can constructively challenge customers and clients who start to drag their feet in paying me what they owe me for my efforts on their behalf by using the Late Payment Act legislation (very easy and surprisingly effective!).

And I can do this openly and in a way that hopefully encourages others to start to do the same - and if you're reading this, that that means I'm challenging you to do the same!

Government have shown that they can't fix this problem, but the tools are there for us if we have the conviction, leadership, and resolve to get the job done ourselves. 

Who's with me?