New guidance has been launched to help SMEs cope with the mental health impact of late payments

Small business owners struggling with the stress of late or unpaid invoices have been given new support, as new guidance is launched to tackle the mental health impact of cash flow stress.

Timed to coincide with Time to Talk Day, the Office of the Small Business Commissioner (OSBC) has published a new online guide designed to help SMEs and the self-employed access mental health support while also pointing them to practical steps to tackle late payment problems.

Late payments are often framed as a financial problem, but growing evidence suggests they can take a toll on health. For many business owners, the uncertainty of when they will get paid can cause ongoing concerns about meeting costs, paying employees and keeping their business running.

The new guidance brings together business-focused advice and trusted mental health services in one place, offering support for owners who may feel overwhelmed. It also outlines practical actions SMEs can take when unpaid invoices start to affect their financial stability and mental health.

The resource was developed in conjunction with research from Leapers, which examined the link between financial stress and mental health among small and independent business owners.

Emma Jones, Small Business Commissioner (pictured), said running a business can be psychologically difficult, especially when payments are delayed. He said it is important that independents and small business owners know where to turn for support and feel able to ask for help.

“Having established a small business support platform and network before becoming the Small Business Commissioner, I have seen the huge and positive impact when freelancers join a community of like-minded peers,” Jones said. “At the Office of the Small Business Commissioner, we are committed to playing our role, focusing on addressing the challenge of late payments, so that those who are self-employed can get the full benefits of self-employment.”

However, some industry figures have warned that support alone will not solve the underlying problem.

Stephen Carter, Director of Payment Strategy at Ivalua, said the guidance was right to acknowledge the mental health impact of late payments but said the government needed to move forward.

“UK SMEs don’t just need mental health support to deal with late payments. They need legislation and enforcement to stop delays in the first place,” he said. “Late payments are not an inevitable fact of life; management failures, accountability and outdated payment processes.”

Carter added that delayed payments are often driven by poor internal controls at large organizations, including disparate procurement and finance systems, manual processes and a lack of visibility into supplier responsibilities. He warned that the consequences could be dire, if supply chains are disrupted and small suppliers are pushed to the brink.

Research cited by Ivalua suggests that more than a third of UK businesses have seen suppliers go out of business due to cost pressures related to late payments.

Carter urged the government to publish its response to last year’s late payment debate without further delay, warning that continued unemployment is a risk that shows large organizations that poor payment practices will be tolerated, while SMEs are left to suffer financial and emotional hardships.