Business groups have collaborated to urge the government to take tough action on late payments. The increasing problems associated with late payments affect business growth, survival of smaller companies and economic recovery. The Forum of Private Business, Graydon UK and Lloyds TSB have joined together in a bid for action from the government.
The group has sent a letter to Mark Prisk, business minister to call for the problem of late payment to be addressed with a plan of action. A number of measures are called for, which includes the EU Late Payment Directive being brought forward to 2012. The directive sets out a standard which has a mandatory 30 day payment period, which the group would like to be confirmed. A practice of suppliers being forced into the acceptance of payment terms which are varied is one area which the group would like to see abolished by new legislation.
Other suggestions have been made, including stopping ‘prompt payment discounts’ being taken by large companies, and the imposition of retrospective alterations to payment terms which are not agreed through a contract. According to a survey by Graydon UK credit referencing agency, 76 percent of businesses believe that the government should be doing more to protect UK companies from problems with late payment. Bacs carried out further studies, which show that small and medium businesses are owed outstanding invoices of £33.6 billion. This is 10 percent more than last year and the highest amount since September 2007, when records started.
Want to learn more?
Subscribe to our newsletter to get accounting tips like this right to your inbox
About The Author
Content Writer working alongside our expert accountants to bring you the latest Tax and Accounting news.