Advice from our Commercial Debt Recovery Solicitors – Know Your Customers
Late payment is a significant and growing problem in the UK, often causing cash flow difficulties, which can lead to insolvency. That’s where a firm of commercial debt collection solicitors, such as Lane and Co, come in. We’ve been around since 1978 and have recovered £10s of millions of bad debts and late payments for our clients. We always advise businesses to check out their prospective Clients’ payment practices before engaging in business with the. Good credit control and the use of factoring are also valuable. However, the statistics below demonstrate that late payment is almost inevitable for any business at some stage.
(Please take a look at this article as to how our debt recovery solicitors can help directors pay themselves).
The Scale of the Late Payment Problem in the UK
It is estimated that 17% of all payments in the UK are made late and that 9% are eventually written-off as bad debts. Indeed, the UK has the highest proportion of invoices that are paid late on the world, a problem that translates into some eye-wateringly large numbers. According to ‘UK Debt Collection News’ – UK Tradespeople are owed over £30 Billion in unpaid debt.
The National Federation of Builders has identified that over 30% of late payments are within the construction sector, resulting in £30 Billion being owed to small and medium sized Construction firms including self-employed builders, roofers and joiners.
This picture is replicated across all industry sectors.
What is the Government Doing About it?
The Government introduced new legislation which came into force in April 2017 which requires large companies within the UK to disclose the time frame in which they will pay their suppliers. These large companies will need to publish information on:
- Standard payment terms
- Percentage of invoices paid in 30 days, percentage paid between 31 and 60 days and those paid over 60 days
- Percentage of invoices not paid within the agreed terms
- The process for resolving payment disputes
- Sums deducted from invoices to remain on a supplier list
- The availability of e-invoicing and supply chain finance
- Membership of a payment code
Reporting will be required every 6 months and the report will be published on a central government website allowing businesses to look at their potential clients’ record before engaging in business dealings with them.
Click on this link for more information
Contact our Commercial Debt Recovery Solicitors for Help
Despite the efforts of the government, the reality is that late payment is not going away. Companies of all sizes are affected, but often it is the SMEs, especially those a long way down the supply chain that suffer the most and are most vulnerable.
If your company is facing continued and on-going problems with late paying customers, talk to us. Our experienced and professional debt recovery solicitors will work with you and advise you every step of the way. Very often it is a letter before action that does the trick. However, if the claim is disputed, the litigation and ultimately business debt enforcement will be needed.
Please contact us or call us on 01922 700 730 for more information and a FREE initial discussion of your late payment problem.
Click here to see some of our testimonials