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Late Payers Beware!

Late Payers Beware!

Category: Business

Updated: 31/10/2008
First Published: 28/06/2006

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

A survey among UK companies by Better Payment Practice Group (BPPG) has confirmed that three in ten have been to court in the last year to collect outstanding debts from business customers. Of the 292 respondents of the poll, 31% had been to court in the last 12 months.

Clive Lewis, Head of SME Issues at the Institute of Chartered Accountants commented: "Going to court can be an effective method of recovering money owed, but it can also be expensive, stressful and time-consuming and should be seen as a last report. Businesses can do a great deal to improve their credit management procedures to avoid bad debts in the first place, such as credit checking new customers, agreeing terms of trade at the outset, invoicing promptly and persistently chasing late payments."

He continued: "If further action is required, then alternatives to court, including employing a collection agent or getting a solicitor who specialises in debt collection to write a strongly worded letter of your behalf, should be considered first."

As late payment can be seen as a sign of a poor relationship between a company and their supplier, the benefits of paying on agreed terms are plentiful. Particularly, strengthening a company's reputation with a supplier, encouraging new companies to compete in the supply arena, benefiting buyers with a wider range of supply sources and strengthening the competitiveness of the UK economy in the world market.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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