Credit risk specialists Graydon have called on the Government to reassess regulations introduced ten years ago aimed at assisting small businesses in tackling the issues of late payment.
The 1998 regulations allow companies to impose interest on bad paying debtors, but research has shown that the vast majority of SMEs do not exercise that right. It is a fine line that most small businesses run, caught between the need to increase and maintain sales and keeping a constant cash flow. Many SMEs believe that imposing interest charges will result in losing business to rivals who are better placed to offer longer payment terms.
Martin Williams, Graydon managing director, said it was time for ministers to take action. “Late payment is starving businesses of cash which is rightly theirs and is heightening the risk of them going to the wall in an already incredibly challenging economic operating environment.”
Graydon’s claims are backed by small business groups Institute Of Credit Management (ICM) and Forum Of Private Business (FPB), who agree that the government must do something to prevent the further increase of the bad payment ‘disease’.
With a down turn in business looming large, whatever happens, it is likely to once again be too little too late for many struggling SMEs.
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1 comment so far
1 Susan Kishner // Apr 9, 2008 at 11:43 am
Nice writing style. I will come back to read more posts from you.
Susan Kishner