Q. I supply electrical components to local manufacturing businesses but they are taking longer and longer to pay me because of the credit crunch. I don't want to sue them or issue a statutory demand as I might lose their business. Is there anything else I can do to hurry them up?
A. A significant number of businesses fail as a result of late or unpaid commercial debts. Indeed large businesses are often prone to using their commercial weight in this area to exploit commercial advantage and delay payments to smaller suppliers who need the money faster to meet their expenditure.
Most businesses are unaware that they are entitled to 8% above the Bank of England base rate set on a twice-yearly basis and debt recovery compensation of up to £100 on each overdue order under Late Payment Legislation.
You could therefore advise the businesses that you are supplying that, if they continue to delay payment in this way, you will have no alternative but to claim interest and compensation and this should encourage them to pay within the contractually agreed timescales.
Poor debt recovery practices can lead to financial difficulties for small businesses. However, we have a wealth of experience of assisting businesses and should you require any assistance please contact Keith Swan by email at ks@pgslaw.co.uk or by telephone on 0808 231 7043. Patterson, Glenton & Stracey have provided legal advice to the people of South Tyneside for over 125 years. For details of their full range of services and to view previous Gazette articles please log on to www.pgslaw.co.uk.
