Eighty-three per cent of small to medium-sized enterprises in Britain are not charging interest on late payments - despite the fact that legislation allowing this was introduced almost a decade ago.
This figure, revealed as part of ongoing research from Bacs Payment Schemes, highlights the ongoing battle SMEs face clawing back the estimated £18.6billion that is collectively owed to them in outstanding payments.
Initially launched on November 1,1998, the Late Payment of Commercial Debts (Interest) Act was introduced to offer SMEs protection against late payments by providing them with the statutory right to charge interest on overdue invoices.
“These figures are surprising considering the scale of late payment problems in Britain,” says Michael Chambers, managing director of BACs. “Research conducted by Bacs at the end of 2007 showed a typical SME is now owed an average of £30,000 at any one time. Looking at this figure and other facts at hand, it’s high time businesses started to tackle this problem head on.”