Business Secretary Grant Shapps has announced an in-depth review into tackling late payments for small businesses.

At the moment there is no legal obligation to pay small businesses promptly, with £23.4 billion currently owed in outstanding invoices. However, the new payment and cashflow review is aimed at ensuring SMEs receive the payments they deserve.

The review will look into existing payment practices to prevent large firms taking advantage of smaller suppliers and encourage them to pay on time.

The Government has started debating new legislation, known as the Procurement Bill, which would set out a 30-day payment requirement in public sector supply chains.

It will look into how certain sectors have combatted late payment issues, as well as examine current payment reporting regulations and the prompt payment code.

Furthermore, the review of the Small Business Commissioner will help ensure the UK has the necessary arrangements in place to best support small businesses.

Commenting on the Bill, Grant Shapps said:

"This review will allow us to build on the success we have had so far in curbing late payment, unshackling small businesses from this exploitative practice and creating a system that is fit for the future."

Talk to us about your cashflow.