Late Payments

All businesses are entitled to claim statutory interest and debt recovery compensation of up to £100 for the late payment of commercial debts.

The Forum of Private Business (FPB) has long campaigned to bring an end to late payment practices and was instrumental in helping to get the statutory right to interest on late payments passed into law. A recent survey on the FPB website (www.fpb.co.uk) revealed that 63.6% of businesses replying said that late payment had adversely affected their business.

A recent Lloyds TSB Commercial Finance survey highlighted that late payment is still a problem. When it came to excuses for late payment, these included ‘the boss has died and the cheque book was in the suit we buried him in’ and ‘I’ve just been diagnosed with agoraphobia - I can’t go out to post the cheque’. Whilst these far-fetched excuses may bring a smile to your face, businesses pushed to the edge waiting for debts to be paid are unlikely to see the funny side. There is no doubt that late payment is a serious issue that can act as a significant barrier to growth.

The Better Payment Practice Group has produced an updated version of its Guide To Paying And Being Paid On Time. It offers advice on credit-checking new customers, collecting payments promptly and creating a good relationship with both suppliers and customers. The guide can be found at www.payontime.co.uk

The Lloyds TSB survey concludes that it is in the best interests of all businesses to address the problem and put in place systems aimed at improving payment practices across the board.