Government promotes prompt payment
Posted: 18th February 2012
With economic times still tough, but some potential green shoots visible, the Government has issued a call to encourage prompt payment and for small firms not to be chary in chasing debts.
The Government is encouraging small businesses to:
- proactively agree payment terms before delivering orders;
- sign-up to the Government’s Prompt Payment Code;
- raise complaints over late payment from Code signatories and use legislation already in place to help companies pursue late payers; and
- use electronic invoicing and payment where possible.
If the economy has turned the corner, the period of greatest risk is as the upturn starts. This is because it is cash-flow more than profit which creates the risk of insolvency. As a business expands, it needs to borrow more to finance its increased stockholdings and debtor book, and late payment by creditors can be fatal in such circumstances.
If you are having problems collecting your debts, contact us for advice before the situation becomes critical.