New Name and Shame for Late business Payers

Medium to small businesses are at risk of being paid slowly by larger clients. Really bad late payment can even lead to insolvency in the worst cases. It has come to the point that after many years that the chasing of late payment and managing debtors is a day-to-day task for many small businesses.

In an attempt to help businesses overcome the threat of late payment the Government introduced the Late Payment of Commercial Debts (Interest) Act 1998. This gives small firms with 50 or less employees a statutory right to interest for the late payment of commercial debts. This statutory right to interest and other new entitlements are available to all businesses and public sector bodies from 7 August 2002.

You can many things to avoid the dangers of late payment:-

1. Clearly print your terms and conditions for payment on any contracts (or order confirmations) signed with an end-client. These terms should clearly state the payment period for any invoice - quite often you would expect payment within 30 days, but this could be shorter or longer depending on your type of business. Company Credit Checks are a way of checking your new customers and existing customers

2. You could offer an early payment discount, or a discount for upfront payment of several installments. For example, you could charge £500 + VAT for a service/product if the amount is settled within your agreed payment period, and £475 + VAT if payment is made within 10 days. This is likely to encourage many clients to pay early, although you will of course make less money on each deal.

3. If a client has not paid on time, it is essential to follow up on the invoice. Always try to obtain a point of contact in the accounts department since this will save time. Politely ask for the payment to be made and if the problem persists, you can consider charging interest on the overdue amount, or in the worst case, threaten the late payer with legal action.

4. The Late Payment of Commercial Debts (Interest) Act 1998 allows small businesses to claim interest on overdue payments from other companies. Originally drawn up to help small businesses claim against larger businesses, the law now extends this rule to claim debt recovery against other small businesses. Even if you did not state a payment period in the initial agreement with a client, the Act states that a payment becomes 'late' after 30 days. You are entitled to claim interest at 8% above the prevailing Bank of England base rate. It is worth quoting the Act on any invoices sent to clients.

5. Clearly many small businesses feel vulnerable in demanding payment from larger companies, this is very understandable. For this reason, it is essential to follow the initial steps mentioned above when doing business with clients. If late payment occurs, always try to politely obtain settlement for overdue invoices before taking further action.

There are many ways to use the internet to help combat late payment. One of the newest is a name and shame web site offering membership services.

Name and Shame your business late payers NOW

It has long been said that UK companies have a reputation of being the worst of the European late payers. Legislation to reduce payment delays and add interest to overdue invoices has been in place for a long time with little sign that it is being adopted.
A major factor for UK companies taking longer to pay invoices was the increase in interest rates. In times of high interest rates it was natural to look on suppliers as a cheap form of loan. Extending payment for 1 month means that you do not have to borrow and pay interest to a bank to fund that loan for 1 month. With banks tightening their belts it is harder to get loans and coupled with a reduction in interest rates the delaying of payment still continues as a method of managing cash flow.
Industry late payment figures have shocked industry observers who fear that late payment is likely to get worse with the rise in interest rates and the economy taking a downturn, factors that make retaining cash for as long as possible even more attractive. This level of late payment comes despite legislation phased in since 1998 that was designed to encourage better payment practice by allowing firms to claim interest on Invoices that were not paid on time.
The UK culture of late payment damages business, employment and international trade.The two main factors agreed by many to be the greatest challenge to business growth is restricted financial lending and late payment. The two go hand in hand. Banks will not lend money so where else can a business be funded ? For many it is the unfortunate supplier and it is the less vigilant or commercially aware supplier which suffers.
This is the point at which companies have to be aware of the other tools available to them. For new accounts a company credit check is essential, whilst these are historical they provide useful information. The use of other methods such as http://www.due2pay.co.uk/ , business debt collection and solicitor’s letters may seem extreme but are essential in this day and age. DUE2PAY’s approach to late payment takes the company credit check to a much needed area. Companies have been wanting a central register of late payers for a long time. With DUE2PAY a company can list a late payer and other members have sight of this information, simple.
Where late payment is traditionally one sided in favour of the late payer, DUE2PAY redresses the balance by giving the late payer the opportunity to flag up a reason for late payment of a specific invoice or invoices. All members have sight of this information and all members can contact the late payer or other members. Court action or solicitor’s letters do not offer this service. Debt recovery has now been taken to a new level with DUE2PAY.

how to manage late payment in business

Tips for getting late payments paid earlier or on time
Don’t listen to the excuses
You may already know most of them, “Can you resend the invoice”, “it’s passed for payment” and ‘the cheque is in the post’. Get invoices paid directly into your account. Your customer can't them use the excuse that the cheque may be lost or that it is waiting for signature. You can also now list a late payer on sites which offer company credit check services, websites which are cheap and cost effective.
Work at it
Don’t think that businesses will pay you on time. You need to build relationships with people who hold the purse strings in companies which are slow in paying. Phone them, talk to them, smile on the phone to them, get them on your side. Be like a rat up a drain pipe and pester them in a nice way. Before you know it you will be the first to be paid. A phone call in advance of the payment date confirming that you will receive payment puts your contact on the spot and he might not want to let you down. Paying direct into your bank is good, meet with your customers and press them into this
Ask for interest and ask for prompt payment
It is possible and legal to ask for interest on late paid invoices.
Encourage prompt payment, if your pricing allows , hard in today’s climate, offer a prompt payment discount and link it in with Bacs electronic payment. You will see a positive cash flow with money going into your account quickly. Not waiting for money to clear means that you can use it immediately and don’t have to rely on costly loans.
Do as you ask
Don’t get a bad reputation yourself as a bad payer news travels fast so pay your suppliers on time.
Is a business a bad risk ?
Check them out through debt recovery companies or associations they may be in, check out Companies House which can provide reports on line to you. Prevent risk by doing a credit risk check on all new potential customers. risk by performing a credit check on all new customers. Beware of companies which give may give referees which provide a big proportion of their supplies, ask what percentage they are responsible for. That supplier may be paid on time every month because not to do so could influence deliveries. Business debt collection is hard, one needs to be tough to make it work.

Internal Cost of Late Payment
Some companies are paying for dedicated staff to chase late payment others are not so fortunate. On average the internal cost for those not able to afford dedicated staff can be up to 20 lost working days per year.

Ways to recover late business debt payment

More and more businesses are finding that they are spending more on debt recovery collection than ever before. The cost of funding staff to chase late payment is spiralling. Those companies which don't chase late payment find themselves getting deeper into debt and possibly closing when they failed to pick up on the fact that a customer was on it's last legs

Work at it
Don’t think that businesses will pay you on time. You need to build relationships with people who hold the purse strings in companies which are slow in paying. Phone them, talk to them, smile on the phone to them, get them on your side. Be like a rat up a drain pipe and pester them in a nice way. Before you know it you will be the first to be paid. A phone call in advance of the payment date confirming that you will receive payment puts your contact on the spot and he might not want to let you down. Paying direct into your bank is good, meet with your customers and press them into this

Is a business a bad risk ?
Check them out through any associations they may be in, check out Companies House which can provide reports on line to you. Prevent risk by doing a credit risk check on all new potential customers. risk by performing a credit check on all new customers. Beware of companies which give may give referees which provide a big proportion of their supplies, ask what percentage they are responsible for. That supplier may be paid on time every month because not to do so could influence deliveries.

Ask for interest and ask for prompt payment
It is possible and legal to ask for interest on late paid invoices.
Encourage prompt payment, if your pricing allows , hard in today’s climate, offer a prompt payment discount and link it in with Bacs electronic payment. Threaten to put the matter in the hands of professional debt collection agencies. You will see a positive cash flow with money going into your account quickly. Not waiting for money to clear means that you can use it immediately and don’t have to rely on costly loans.
Do as you ask
Don’t get a bad reputation yourself as a bad payer news travels fast so pay your suppliers on time.

Don’t listen to the excuses
You already know most of them, “Can you resend the invoice”, “it’s passed for payment” and ‘the cheque is in the post’. Get invoices paid directly into your account. Your customer can not themn use the excuse that the cheque may be lost or that it is waiting for signature.

a better way to control late payment

It has long been said that UK companies have a reputation of being the worst of the European late payers. Legislation to reduce payment delays and add interest to overdue invoices has been in place for a long time with little sign that it is being adopted.
Industry late payment figures have shocked industry observers who fear that late payment is likely to get worse with the rise in interest rates and the economy taking a downturn, factors that make retaining cash for as long as possible even more attractive. This level of late payment comes despite legislation phased in since 1998 that was designed to encourage better payment practice by allowing firms to claim interest on Invoices that were not paid on time.
A major factor for UK companies taking longer to pay invoices was the increase in interest rates. In times of high interest rates it was natural to look on suppliers as a cheap form of loan. Extending payment for 1 month means that you do not have to borrow and pay interest to a bank to fund that loan for 1 month. With banks tightening their belts it is harder to get loans and coupled with a reduction in interest rates the delaying of payment still continues as a method of managing cash flow.
With DUE2PAY a company can list a late payer and other members have sight of this information. Find more out here.
Where late payment is traditionally one sided in favour of the late payer, DUE2PAY redresses the balance by giving the late payer the opportunity to flag up a reason for late payment of a specific invoice or invoices. All members have sight of this information and all members can contact the late payer or other members. Court action or solicitor’s letters do not offer this service. Debt recovery has now been taken to a new level with DUE2PAY.
The UK culture of late payment damages business, employment and international trade.The two main factors agreed by many to be the greatest challenge to business growth is restricted financial lending and late payment. The two go hand in hand. Banks will not lend money so where else can a business be funded ? For many it is the unfortunate supplier and it is the less vigilant or commercially aware supplier which suffers.
This is the point at which companies have to be aware of the other tools available to them. For new accounts a company credit check is essential, whilst these are historical they provide useful information. The use of other methods such as due2pay.co.uk , business debt collection and solicitor’s letters may seem extreme but are essential in this day and age. DUE2PAY’s approach to late payment takes the company credit check to a much needed area. Companies have been wanting a central register of late payers for a long time.

new late payer website, free trial

DUE2PAY is a web site aimed at bringing common sense back to the problem of late invoice payments, by tackling debt recovery in a new way. Late invoice payment is now regarded as an acceptable practice for late payers and an addition to business debt collection . In some cases the practice is an effort save a business from closing, for other companies the philosophy is to dot it as and acceptable to fund an already profitable business. Consider www.due2pay.co.uk as an early warning system, an alarm which if triggered can save you a lot of money for a fraction of the cost of the interest you are paying in funding your customers' businesses. Or a fraction of the cost of phone calls to chase payment and of solicitor's letters.
The Forum of Private Business in the UK says that late payments of invoices are having a serious impact on 70% of firms, with nearly 60% reporting that the situation had worsened over the past year. It is apparent that this scenario of late payment is being used as a form of free credit for businesses. Delaying payment to many customers funds a business and reduces bank borrowings. Any surplus cash held by a customer will in turn earn interest. Depending on the size of firm, late payments can have a major impact with a third of firms losing between £1,000 and £5,000 a year as a result and 15% losing between £5,000 and £50,000. On a daily basis we are hearing of companies forcing firms to accept mandatory discounts, longer payment times, and payment delays.
You can use www.due2pay.co.uk along side a company credit check. In fact it can work well alongside other traditional methods such as business debt collection and company recovery of debts through outside agencies which take a more hands on approach. UK government introduced the right to charge interest on late payments but this rarely happens in practice. www.due2pay.co.uk has two interesting powerful strings to its bow.
1) Where the website sends an email and fax to a customer asking them to pay an invoice within 14 days. If it remains unpaid, then the supplier is revealed on the site as a late payer. A nice addition which shows it is not all one sided is that the late payer is given the opportunity to 'dispute an invoice' and potential suppliers can enter into discussions with them and also the aggrieved supplier.
2) The 'Watch List'. Put a company on your Watch List and when it is listed as a late payer you will be informed by email.Large companies are using various methods to keep more money in their accounts. For example increasing the time it takes to settle suppliers' bills from 30 days to 75 days and imposing a 2.5% ' settlement' charge on payments. Cutting payments to suppliers by two per cent, despite one company almost doubling its annual profits.
The FPB says that it wants to see the Government 'leading by example' by committing to paying its suppliers on time, as well as introducing a code of conduct for itself and big companies. Chief Executive of the FPB, Phil Orford, said: 'Protecting cash flow, which is the lifeblood of any small business, has become even more important because of the credit crunch. We would like to see non-statutory measures implemented to enable businesses to hold late-payers to account without fear of losing customers and contracts.' Join www.due2pay.co.uk now and take advantage of the free trial

DUE2PAY addresses late payment, what businesses want

Never before has the need for businesses to pull together been as important as now. For many a day UK companies have been regarded as ruthless and with a reputation as being the latest of the late with regard to being late payers. The government has put in place legislation over the years to stop payment delays and with the extra bonus of adding interest to overdue invoices. There has been no indication that take up has been popular

One of the main reasons that businesses in the UK have taken to increase their payment times was the increase in interest rates. During periods of high interest rates businesses naturally resorted to using their suppliers as a bank able to give low interest loans but in their case, it is interest free. When a company extends paying an invoice by 1 month, that business will not have to fund the equivalent amount with their bank, it also means that they do not have to approach the bank for a loan for that amount. We now know that banks are more reluctant than ever to advance loans. Even today even considering the reduced interest rates the delay of paying continues as a way of managing cash flow.
Industry late payment figures have surprised observers of industry trends, they fear that the uncertainty in the economy will make things worse for those who supply the late payers. The downturn in the economy, the heavy discounting by retailers is getting worse and with the global economic conditions and anything that a company can do to retain cash for as long as possible will be even more attractive. This trend to late payment is in spite of the legislation phased in since 1998 which was designed to develop a better payment practice by letting businesses ask for or claim interest on Invoices that have not been paid on time.
The UK dependency on late payment is detrimental to business, jobs and also global trading. It is thought that one of the biggest challenges to increasing the growth of business is late payment and lack of bank loans. They go hand in hand. If a bank is not lending to businesses, the supplier will be put under pressure and will suffer.

All businesses which supply others have to be aware of tools which can help them be more successful. When considering new business, a company credit check is usually the first port of call, although giving historical information they are extremely good to use. Other methods which are available such as http://www.due2pay.co.uk/ , business debt collection and solicitor’s letters may be thought to be aggressive but can be essential today. DUE2PAY has a novel way which to tackle late payment taking the company credit check to a new level. Companies have been wanting a central register of late payers for a long time. These businesses can now list a late paying company and other members have sight of this information, simple.
Late payment has traditionally been very one sided in favour of the late payer, DUE2PAY addresses this in giving the late payer the chance to flag up a reason for his late payment of a specific invoice or invoices. Every member of DUE2PAY can access this information and all members can contact the late payer or other members. Court action or solicitor’s letters do not offer this service. Debt recovery now has a meaningful alternative with DUE2PAY.

Try DUE2PAY and the on stop accounts will start again

From www.due2pay.co.uk, the easy way to manage late payment and debt recovery. Follow the link to find a 60 day free trial and a low monthly membership for features to help your business.

The business world is a two way affair between Customers and Suppliers. Whilst things look gloomy on the payment front, customers will look at legitimate ways to delay payment.
Legitimate ? ? Yes, they may ask for extended terms. They will want to do this to create a buffer in their business. They don't want to be subjected to business debt collection agencies knocking on their door. They don't want to have a company credit check show them as a bad risk. Many suppliers will put their customers on stop, an onstop system is fine until pressure is placed on the supplier, it may be the threat of losing business to a competitr or being held responsible for their customer ceasing to trade.

Banks have been concentrating on quantity of loans and will look closely at the quality of loans with their accounts. A move could may take place to change interest only loans to another style, perhapes those which show more payment off to the capital other types certainly ones which show payment to the capital. Some banks may not be concerned about losing customers as other banks will not want to pick up the business.
The credit cycle is forever ightening, it’s a knock on effect throughout industry.
One business starts to tighten its terms and it cascades right down the supply chain.

Make sure you and your staff are on the watch out for the tell tale signs of late payment. These are numerous, amongst them are late delivery of cheques, bouncing cheques and excuses over the telephone.

Look at your existing businesses now, any which are showing signs of slowing their payment should be monitored regularly. Overdue Accounts which are allowed to stay that way are difficult to turn round. Don’t forget that if customer has problems now in paying outstanding debts, then it will be hard to catch up unless his customers start to pay monies owed to him on time.

Debt recovery from a company on the slide is a hard thing especially if they have been with you for a long time. Tough decisions need to be made especially if you have developed close personal times with the key players.

New customers need to be subjected to a normal company credit check there is no harm in vetting them using other industry sources. Information can be gleaned from Companies House and any of the other credit referencing companies which use their information.

Business debt collection and debt recovery

The commercial world is tightening its belt. Major Banks are reporting a growing number of British firms have fallen behind with their repayments. Business debt collection is more important than ever to prevent cash flow issues. This has led to larger companies getting more aggressive and

1) forcing extended credit terms on suppliers
2) demanding discounts on already agreed prices
3) demanding settlement discounts for just paying on time
4) Imposing retrospective rebates for goods already delivered.
5) Using late payment as an easy way of funding their own cash flows.

These are extremely worrying developments for the whole business community.

It is now more important than ever for small businesses to protect themselves and ensure invoices are paid on time ensuring a company credit check is carried out.This will help them avoid potential cash flow problems, which, if not addressed quickly could result in the ultimate closure of their business.
An internet based service to help victims of late payments called DUE2PAY LIMITED has been specifically designed to help these companies recover their overdue invoices, without the need to go to court or traditional debt recovery methods. It acts to share information on companies identified as late payers by fellow members, giving them the opportunity to make more informed decisions in dealing with a particular company.

The service is offered free on a 60 day trial, after which, normal membership fees will apply. If you are interested please contact DUE2PAY.CO.UK

.....late payment of invoices no more

DUE2PAY is offering a totally unique service which is a valuable addition to the credit referencing services provided by companies such as Experian and Equifax. DUE2PAY has been described as being more punchy with more debt recovery than a Solicitor's Letter. It was conceived in the first place as a bolt on to exisiting credit referencing, business debt collection and credit checking. DUE2PAY is an important tool for Companies which want to check the credit worthiness of potential customers and who want to keep track of their customers which may start to pay their bills late. It is an excellent resource for checking on companies you may wish to do business with.

Many companies do not to think how much time and money is spent on phone calls, faxes, visits and solicitor letters. One late payer can cost you well over £100 which is near enough the annual cost of being a member of DUE2PAY. For this, members of DUE2PAY get an array of services which goes far beyond the benefits of traditional credit checks and the costs of traditional debt collection such as solicitors letters and the associated costs of court action.

Vetting of new customers with traditional company credit check can be slow. Companies will rely on commercially available reports which can be over year old. Hasty decisions to do business in the current economic climate can give payment problems in the future. Recovery of invoices owed and their collection can be handed over to a third party though this still involves the supplier in a lot of work. There is nowhere else that you can turn to find up to date information on Late Payers.

As long as there is no dispute over your invoices or transactions, you can let your supplier know that you want your money on time. DUE2PAY's simple interface allows you to take control.

If you do not have any overdue accounts, you can still join up and use the Watch List feature which will keep you informed whenever a company is listed as a late payer.