UK BUSINESSES ARE THE WORST PAYERS IN EUROPE. ARE YOU SURVIVING?

Research has shown that UK businesses are comfortably taking two months - 60 days - to pay their bills, almost the same as a year earlier.

Even though the Late Payment of Commercial Debts (Interest) Act was introduced 7 years ago to curb the delay in paying invoices, companies are getting worse rather than better with their payments.

UK businesses are comfortably taking two months to pay their bills

The report analysed the payment patterns of 366,633 companies, and shows that large companies are the worst payers with payment delays of an average of 80.6 days, compared with 80.3 days a year earlier. Large companies take an average of 21.4 days longer to pay their bills than small companies and 20 days longer than medium-sized companies.

Insolvencies in the UK in 2006 hit their highest level since 2002, and late payments by suppliers play a major part in business failure and a rapidly deteriorating payment trend is very often a warning sign that a company is in financial difficulties and heading towards insolvency.

With the outlook not looking at improving in the near future and an uncertain economic outlook for 2008, companies should prepare themselves for an increase in bad debt.

Membership schemes such as Master Club prevent bad debts from becoming problems

Membership schemes such as Master Club not only prevent bad debts from becoming problematic by offering credit referencing and credit control services, they also help recover monies which are long overdue.

Carlo Pegna, Master Collection’s Legal & Operations Manager, added: “Master Club members benefit from expert advice helping them tackle problem clients. We help our members chase and collect monies without the stress and delay of legal proceedings. But if legal proceedings are viable we have an excellent in-house legal department. Our methods are very effective and ensure a good relationship is maintained between debtors and creditors, so future business can be transacted”.

Company Directors and Credit Controllers have a responsibility to their shareholders and employees to ensure that they protect themselves from customers that simply pay late and those that are suffering cash flow problems. Payment records of prospects and customers - even if they've been customers for years – should be checked on a regular basis.

For expert advice on preventing bad debt contact Carlo Pegna on 01992 890391.

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© 2007 Master Collections Ltd