The latest Economic Downturn Panel survey shows that late payment problems are causing small business owners more sleepless nights than any other issue currently.
In all, 42% of FPB members who took part in the survey reported a deterioration in prompt payments from customers – typically bigger businesses.
However few business owners in the UK take an assertive approach with their credit control and allow the customer to dictate the terms. A low percentage charge interest to their debtors in the fear that customers will simply take their business elsewhere.
Under the Late Payment of Commercial Debts (Interest) Act 1998, small businesses have a Statutory Right to Interest (SRI), meaning they can in theory charge for late payments. The payontime web site provides more details and a calculator to see what you could charge.