The late-payment crackdown regulates you too: soon an ignored invoice approves itself

Every article about the Commercial Payments Bill is written for the small supplier who is owed money, and fair enough: the government puts the cost of late payment at £11 billion a year, and this is the biggest rewrite of payment law in a generation. But every small business is also a payer. You have suppliers, their invoices arrive in your inbox, and the same bill that protects your invoices regulates your handling of theirs.

The half nobody is writing about is the half that lands on your bookkeeping.

What the bill actually does

The bill went into Parliament in May 2026 and finished its Lords committee stage on 21 July. It is not law yet, and the government says the powers will not bite before a lead-in and a transition period, so nothing here is in force. The shape, though, is now clear from the bill itself and the government's own factsheets:

Payment terms in commercial contracts are capped at 60 days, with strictly limited exemptions. The consultation response signalled an intention to bring that down further, to 45 days, over time.
Interest on late payment becomes mandatory at 8% above the Bank of England base rate. The old trick of agreeing a token contractual rate instead is closed.
If a purchaser raises a dispute late, or without enough information for the supplier to act on it, the supplier gets a right to a fixed sum on top. Late, in the bill's terms, generally means inside the final eight days before payment falls due.

That last one is the quiet revolution. The consultation had floated a 30-day window to verify or query each invoice; the bill reaches the same destination by a different road. Query an invoice in good time, with substance, and you are fine. Sit on it until the week it is due, then produce an objection, and the objection now costs you money. An invoice you ignored is, in every way that matters, an invoice you accepted.

60 days: The cap on payment terms, with limited exemptions
8%: Above base rate, the interest a late payer owes by law

Why a monthly bookkeeping habit stops fitting

Picture the routine in thousands of small firms, possibly including yours. Supplier invoices arrive by email all month. Some are forwarded to a folder, some sit in whoever's inbox they landed in. Once a month, before the pay run, somebody goes through the lot: codes them, queries the odd one, pays the rest.

Under the current law that is untidy but survivable. Under the bill it has a structural problem: a query that surfaces at the monthly session may already be inside the eight-day window, or past the due date entirely, for any invoice that arrived early in the cycle. The cadence is the compliance failure. Nobody did anything wrong on the day; the process was wrong all along.

The commissioner enforcing the sharp end of this, with powers to investigate, adjudicate and fine, is aimed at larger businesses that pay small ones badly. A ten-person firm is unlikely to be the target of an investigation. But the contract terms themselves, the 60-day cap, the statutory interest, the fixed sum for a late dispute, are implied into ordinary commercial contracts. Your supplier does not need a regulator to claim them. They just need to notice.

The smallest process that fits

None of this requires an accounts-payable platform, and for most small firms buying one would be the wrong reflex. What it requires is that three questions always have an answer:

01Where do supplier invoices land? One address or one folder, not whichever inbox the supplier happened to have. Forwarding rules cost nothing
02Who decides, within days of arrival, that an invoice is right or that it needs querying? A named person, and the query goes out when it is raised, not at month-end
03Where is the decision recorded? An invoice marked approved, queried or disputed, with a date, is the evidence that your objection was made in time

The invoice-approval half of this can be a weekly twenty-minute habit in the software you already run: most bookkeeping packages have an awaiting-approval state that small firms simply never use. The pay run can stay monthly. It is the looking that has to speed up, not the paying.

This is the same family of change as the e-invoicing decision coming in 2029: government reaching into the mechanics of how invoices move, and rewarding the firms whose paperwork flows through one place. If your invoices already land against the right records automatically, both changes are a shrug. If they live in an inbox, both are the same nudge to take the routine out of human memory, which is work we do without ever recommending software the job does not need.

Our sister accountancy practice sees the monthly-session habit from the inside, and the honest report is that it persists because it works, until something external breaks it. This bill is that something, arriving slowly enough to fix the process calmly. If you want a second pair of eyes on where your invoices actually go, ask; mapping it takes less than an hour, and the map is usually a surprise.

We work with businesses across Knutsford, Alderley Edge, Wilmslow, Altrincham, Stockport and Warrington, and remotely for clients anywhere in the UK.