Chasing late payments
Nearly a quarter of UK businesses report that late payments threaten their survival. The Federation of Small Businesses reports that the problem goes beyond just paying late. It encompasses practices like retrospective discounting and ‘paying-to-stay’, which sees smaller companies paying to be retained as suppliers without any promise of work.
If no explicit terms for payment are agreed, then legally, payment is assumed to be due after 30 days for the purpose of charging statutory interest. At present, a government-sponsored voluntary Prompt Payment Code exists, requiring signatories not only to pay within 60 days - in line with legal requirements - but also to work towards payment within 30 days. Some large businesses now have to report on their payment terms and practices, to allow other businesses to check their payment track record before taking on work. The government also encourages recourse to the Small Business Commissioner, whose office helped small businesses recover over £2 million in unpaid invoices last year. It will now also have input into the Prompt Payment Code.
The government is looking into new ways to require large firms to pay supply chains promptly. Ensuring company boards have responsible payment practices in place throughout their supply chain is one area under consideration. So, too, is helping small businesses pro-actively manage the payments process, using state-of-the-art accounting software. This is an area in which we would be happy to advise.
Got a question?
Why not fill out our quick contact form below and a member of the team will respond shortly.
Receive our FREE monthly eNEWS, keeping you up to date with the latest news.
Registration on our website is quick and simple. On registration you will benefit from:
- Our FREE monthly eNEWS email newsletter which will keep you up to date with the latest news (this service is optional)
- On registration we'll email FREE resources to you with our compliments.
You only have to register once. You will be given a username and password that you can use at any time to log back into our website.
Register here