Government Launches Prompt Payment Drive

A new iniative has been launched by The Department for Business Innovation & Skills (BIS) to tackle the increasing problem of late payers.  It aims to promote wider cooperation between businesses and suppliers so that payments are received on time.

The initative focuses on small firms encouraging them to minimise the threat of late payment and to pursue late payers.  This includes agreeing payment terms before delivering orders.

Business and enterprise minister Mark Prisk states: “It is hugely important that all businesses, particularly small firms, establish clear payment terms to ensure they get paid on time and successfully manage their cashflow.”

The government’s other recommendations included signing up to its Prompt Payment Code and using it to raise complaints over late payment from signatories.  It also advised SMBs to use electronic invoicing where possible.   If these measures are put into practice the iniative could be a useful tool in the fight against late payment. 

According to recent research 51 per cent of businesses reported that late payment has become worse during the past year.  In the Debt Collect department we recognise the importance of being paid on time, late payment can have detrimental effects on cashflow and in the worse cases it can threaten the ability to continue trading.  It is important that businesses are proactive in chasing late payers.  There has been an increasing demand for the government to tackle the problem of late payment and this is a step in the right direction. The Debt Collect team is able to provide practical advice and assist in the recovery of unpaid invoices.

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