Commercial Payments Bill: what small businesses should do now
Wonderful’s newest post, published on 21 July, looks at the Commercial Payments Bill and starts with the essential point: it is a proposal, not current law. The Bill reached committee stage in the House of Lords on 21 July and must complete further stages before it could receive Royal Assent.
If enacted in its introduced form, it would cap most business payment terms at 60 days, make late-payment interest mandatory at 8% above Bank Rate and give the Small Business Commissioner stronger powers. The wording may change.
Small suppliers do not need to wait. Record agreed terms, keep proof that work and invoices were accepted, learn each customer’s invoicing process and decide who follows up—and when. Faster payment methods can help once a customer is ready to pay; they cannot fix a wrong invoice or an unclear approval process.
A £22 note with two withdrawals
One of the earliest known Bank of England notes is a handwritten £22 promise dated 18 June 1697. The depositor withdrew it in two parts — £5 and £17 — leaving the note itself as a record of what remained.
Set the limits before software can spend
Most small businesses do not need an “AI payments strategy”. They do need clear rules for any software that can recommend or start a payment.
Before connecting a new tool, write down five answers:• What may it buy?• How much may it spend?• Which suppliers may it use?• When must a person approve?• How do we stop it immediately?
Ask the supplier what record you will receive for each action. If you cannot reconstruct the instruction, limit, approval and outcome, keep the final payment step with a person.
For money coming in, start with a more immediate task: check that your invoice terms, evidence of delivery and follow-up process are clear. The Commercial Payments Bill remains a proposal, so improve the records you control now rather than waiting for the law to change.