Small business representative bodies have got the backing of the UK government in their attempt to tackle the long-standing issues of late payments.
An agreement has been signed by members of the Government’s Small Business Economic Forum (SBEF) to commit to developing new measures to ensure payments are made promptly.
The statement, signed by the SBEF, will encourage members to agree payment terms prior to delivery of orders, to raise complaints about late payments from Prompt Payment Code signatories, and to make use of legislation in place to pursue late payers.
Philip King, chief executive of the Institute of Credit Management felt that the involvement of the government is critical in tackling the vitally important issue of prompt payments.
He added: “Our advice, and the message in our Managing Cashflow Guides published with BIS, is that suppliers should not be bullied into accepting unfavourable terms from their customers, and that they should negotiate payment as part of the bigger trading relationship.”
Invoice Finance as late payment solution
If your small business or SME suffers from late-paying debtors, hitting your cashflow hard at time when margins are already tight, have you considered invoice finance as a solution?
Almost £15 billion worth of cash was advanced up-front to clients using invoice factoring or invoice discounting facilities in return for their unpaid invoices in 2010, up from £13.6 billion in 2006.