On 13th March 2018 the Chancellor Philip Hammond made his Spring Statement. He stated that poor payment culture was no longer an environment that would be entertained.
On average businesses are paid 14 days beyond the agreed payment terms for their invoices. Paying creditor invoices is usually 10 days beyond terms. Such poor payment performance is both costly and time consuming.
In December 2017 the office of The Small Business Commissioner was launched to ensure fair payment practices and support in resolving disputes with larger companies. On 9th November 2018 an article by The Greater Birmingham Chambers of Commerce explained how Mr Paul Uppal, The Small Business Commissioner, was assisting with late payment against larger companies.
In the article it is estimated that a third of payments to small businesses are late, with an average value of each payment at £6,142, in total some £14 billion is owed.
I have been working as a Debt Recovery Solicitor for in excess of 15 years, and almost all debts I am instructed about are not against large companies. It would be interesting to know of the £14 billion owed, how much of that is owed by a large business. In my experience, many of payments that are not paid on time are owed by other smaller businesses for balances that would fall into the £10,000 small claims limit, and there is a genuine reluctance to chase payment or implement/ improve credit control practices.
These businesses also need support. Of those that are wanting to pursue bad debts under £10,000, the time it takes and cost involved seems to be the largest obstacle. Mercian Law provide fixed fees for assisting with the court paperwork. We can also recommend often minor changes to try and help reduce the number of outstanding invoices you experience.