Businesses within the North West are the slowest in the country for meeting deadlines for paying bills, a recent surveys shows. The survey, by Experian, found that the situation is getting worse as businesses are trying to stretch the amount of time until they have to pay their bills.
Statistics show that companies in the North West are paying bills on average 37 days late over a week longer than anywhere else within the UK. Certain sectors have been highlighted as frequent culprits, these being telecoms, leisure and hotels, property and food retail.
Obviously with the ongoing economic downturn, late payments can be serious threat, especially for small businesses who depend on prompt payment to retain cashflow. Late payment in these circumstances can have a knock-on effect, meaning that their suppliers then have to wait longer for payment, and the whole scenario quickly becomes a vicious circle.
In the majority of circumstances, businesses are often unwilling to take enforcement action to encourage payment, such as engaging the services of a solicitor for debt recovery, or even adding the additional interest that is often stipulated in contractual terms and conditions.
It is understandable that suppliers will want to preserve a good working relationship with their customers, as they obviously want to retain their future business. However, where it becomes a threat to the cash flow of the business, there is little option for business owners. There comes a point whereby a supplier should ask themselves whether a client/customer who is unreliable when it comes to making payment is one they might actually be better off without.
If you need any advice on how to approach debt recovery, or indeed are struggling to obtain payment and are looking to initiate legal action, such as court proceedings, issuing a statutory demand or starting insolvency proceedings by issuing a winding up petition, please do get in touch with myself or one of our debt recovery solicitors.