late payments continue

[peterjhale]

More than one in ten businesses admit that they would still pay late even though their own bills were paid promptly, according to research.

The survey, carried out by the Better Payment Practice Group (BPPG), revealed that while the vast majority of the 615 respondents were punctual, a large number of companies still believe it is acceptable to delay payments.


These figures maintain a disturbing trend that is hitting business productivity as well as breeding mistrust throughout the business community.

A similar poll conducted in 2003 revealed that 10 per cent of businesses admitted that being paid on time would not make them extend the same courtesy.

Stephen Lewis, member of the BPPG, said, “Our survey should act as a reminder that it pays to undertake some research into new customers before issuing credit. Deliberate late payment is never acceptable and firms should do all they can to safeguard their own cash flow.

With this in mind the BPPG is recommending that businesses incorporate credit-vetting procedures into their credit management practices. Such measures, it is believed, limit the chances of late payment by monitoring new customers during the early stages of the business relationship.

Ways in which customers can be monitored include

• Checking status reports from credit agencies
• Referring to company accounts, which can be found at Companies House.
• Arranging a friendly, informal visit to the customer
• Checking for any registration of County Court Judgements.

“Prior knowledge of a customer’s credit record can highlight the need for preventative measures, such as asking for payment in advance, to reduce exposure to late payment risk”, said Lewis.

[g00gl3r]

Ouch, I pay my bills early in the hope that my suppliers notice me more than the others they sell to and respect that a little. In time, it pays off. If you have the money in the business from your customers it's good to use it to pay for what it should pay for.

Sometimes poeple have plans though that mean they need to old back payments every now and again to enable a large purchase or for example.

[Ian J]

35 years ago Arnold Weinstock built up a relatively small GEC into a giant corporation by using creditors' money to finance his own company's expansion. It was well known that if you dealt with GEC you wouldn't get paid for 90 days but many were happy to trade on that basis as the company was going places.

I started out in the factoring industry in the mid sixties when it was struggling to get established in the UK and I am sure that GEC was the biggest single ally that the industry had as the fledgling factoring industry seemed to be launched off the back of suppliers to that company.