The consensus within business is that although the code is welcome late payment will remain an issue as the scheme is only a code and not backed up by law. Most firms experience problems with late payment and some have been sunk by despite the introduction of the introduction of the legal charging of interest on unpaid bills.
The Government says you can claim interest and debt recovery costs if another business is late paying for goods or a service. If you haven’t already agreed when the money will be paid, the law says the payment is late after 30 days for public authorities and business transactions after either the customer gets the invoice and the supplier have delivered the goods or provide the service (if this is later).
The Government in Berlin is less accepting of late payments in the belief that prompt payment helps everyone in the supply chain”
Dun & Bradstreet, the business analyst, says business can agree a longer period for payments from one business to another, but if it’s longer than 60 days it must be fair to both businesses. The current late payment laws are, in part, due to an EU Directive designed to standardise the right to claim late payment interest on overdue commercial bills throughout its member states although there is as is often the case with directives a get out clause. This allows companies to pay their suppliers over any term they like where agreed – and larger businesses, in particular, find it very easy to persuade smaller suppliers to agree.
Dun & Bradstreet says the average firm in this country pays its bills 15 days late with retailers the worst at paying on time. Britain is on a par with Spain and Italy when it comes to late payers but Germany has moved to improve the situation in the Fatherland where bills are paid nine days sooner on average. The Government in Berlin is less accepting of late payments in the belief that prompt payment helps everyone in the supply chain.
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