July 6, 2009
Business Fails To Tackle Late Payments
Lovetts, a debt recovery law firm, is urging businesses to exploit their right to charge interest and claim compensation on late payment.
It has found that just 37% of all claims issued by the company on behalf of its customers currently have late payment interest and/or compensation applied.
Charles Wilson, chairman and managing director of Lovetts says: “In the first three months of 2008 only 31% of our activity had late payment interest applied, but in the same period in 2009 it was closer to 37%. Clearly there is still much work to be done in encouraging more businesses to claim compensation and interest and thus adopt this effective deterrent against persistent late payment in to their credit control procedures."
Wilson says the use of late payment interest has taken a long while to be accepted by many companies, but ignorance of the legislation may be partly to blame and inevitably it is the smallest businesses that are most affected.
Lovetts says compensation can be claimed for every invoice that was not paid within the credit period and can be claimed even if the invoice has now been paid – in fact, businesses have up to 6 years to claim the compensation.
Up to £999.99, businesses can rightfully claim £40, up to £9,999.99 and they can claim £70 and then beyond £10,000 the business can claim for £100. Businesses can claim this if they have supplied goods and services, their buyer bought for business purposes, the contract is not a consumer credit agreement and the contract does not contain a provision for interest on overdue invoices.
Wilson says: “Sometimes there is genuine doubt about whether an invoice is for the correct amount but that doesn’t negate the opportunity for claims and compensation. We are urging businesses to look seriously at the barriers to claiming late payment interest and compensation and start addressing these. The legislation is there to protect them and with cash-flow so difficult in the current economy, businesses should be using all the tools available in the battle to survive.”
SOURCE: Lovetts, 23/06/09
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