The mental health impact of late payments is finally being acknowledged, with new guidance launched to help freelancers and small business owners cope when cashflow uncertainty starts to bite.
Published to coincide with Time to Talk Day, new online guidance from the Office of the Small Business Commissioner (OSBC) brings together mental health support and practical advice for SMEs and freelancers dealing with late or unpaid invoices.
Late payment is usually treated as a balance-sheet issue. In reality, for sole traders and one-person businesses, it’s deeply personal. When you are the business, delayed invoices don’t just affect forecasts, they affect rent, food shopping, sleep, and mental health.
The guidance signposts business owners to trusted mental health services while also outlining steps they can take to chase overdue invoices and escalate payment disputes. It has been developed alongside research from Leapers, which explored the link between financial stress and mental wellbeing among freelancers and small business owners.
Emma Jones, Small Business Commissioner (pictured), said it was essential that freelancers feel able to reach out for support, particularly when payment delays place pressure on their finances and wellbeing.
“Running a business can be tough at times and it is important that freelancers know about, and feel they can reach out to, the help and support available,” she said, adding that peer networks and shared experience can make a “profound and positive impact”.
But while the guidance is welcome, critics argue it only addresses the symptoms, not the cause.
Stephen Carter, Director of Payment Strategy at Ivalua, said the government is still avoiding the harder conversation.
“UK SMEs don’t just need mental health support to cope with late payments. They need legislation and enforcement to stop delays in the first place,” he said. “Late payment isn’t accidental, it’s the result of poor governance, outdated systems and a lack of accountability from those holding the cash.”
Carter warned that late payment continues to ripple through supply chains, damaging trust and, in some cases, forcing small suppliers out of business entirely. Research cited by Ivalua suggests more than a third of UK businesses have seen suppliers fail due to cost pressures linked to delayed payments.
He called on the government to urgently publish its long-awaited response to last year’s late payment consultation, warning that every month of delay effectively tells large organisations that dragging their feet comes with no real consequences.
