How Late Payment is Affecting Every Business
On 12th April, Else Solicitors sponsored a revealing round table discussion at the Centre for Policy Studies in London. The event attracted credit professionals from a range of household brands including 20th Century Fox, BP, Siemens and French Connection as well as debt collection specialists and advisers from across the UK.
The debate focused on the challenges currently facing companies including the explosion of information and the new data protection laws, recruitment and training and the issue of late payment.
Late payment is endemic in today’s economic environment and impacts every business. The Government introduced the Late Payment Initiative in March 2013 to help but participants felt SMEs were still struggling to get paid as they are scared to enforce it and risk losing the relationship.
Chris Else, Managing Partner of Else Solicitors, explained that the West Midlands Chamber of Commerce has an alternative solution- their new “Pay in 30 Days” initiative. The Chamber is encouraging businesses to support the local economy by pledging to pay suppliers within 30 days. Although it is not legally binding, companies signing up to the pledge are showing their commitment to pay suppliers within 30 days, or within agreed contract terms. This commitment demonstrates corporate social responsibility and makes them more appealing as a potential trading partner.
A recent survey found that, on average, West Midlands businesses are owed over £200,000 and have to wait 90, or even 120, days to get paid. ‘Pay in 30 Days’ hopes to turn the tide on late payment by promoting best practice throughout the local economy.
Mr Else commented: “If every business improved their payments to suppliers it would have a major impact on the local economy. Businesses would have more money to spend on growth and employment.”
Stephen Kiely, editor of CCRMagazine, added: “It is good to see such initiatives moving forward. It really highlights the importance of the work done by credit professionals.”
Chris Else concluded “Any company, with the right system, procedures and terms of business in place, can make major cash flow improvements, minimise bad debt and resolve issues with customers before they get worse. With Brexit and the current economic situation, these things are more important than ever. This round table discussion gave us an invaluable insight into how Else can continue to deliver first class debt recovery and dispute resolution services.”