Prompt Payments To Help Business Survival
In an ideal world everybody would pay their bills, invoices and accounts on time. Unfortunately, however, this is a less than ideal world and many businesses and individuals try to avoid paying their bills even when a debt collection agency gets involved. What they don’t take into account is that by not paying their bills, they could ultimately hurt their own business.
Consider that you place an order but do not pay for it. That company then goes bust because of mounting debts of their own. Now, a new customer comes to you wanting a certain product and you are now unable to get that product because the company who supplied you the materials has gone bust because they were not paid for their services. You lose the customer, the another customer and another and so on until you find that all your customers have gone elsewhere because the companies paying their bills on time are able to keep operating.
Chief executive for the East of England Development Agency (EEDA) Deborah Cadman said, “pay fair and we’ll help each other get through these tough times.” She is urging local businesses to register and sign up for the Government’s “Prompt Payment Code,” which is aimed to get businesses paying their suppliers on time. Cadman is also intending to write to local councils, health bodies, public sector organisations and business groups who have yet to sign up, to secure their commitment to the code.
“As business-focussed organisations, regional development agencies like EEDA recognise the importance of prompt payment. We were among the first agencies to sign up to the Government’s 10-day payment pledge last year, andwe’re right behind this new code. The costs to business of late payments is quite staggering, with one in four companies going insolvent as a result of their invoices not being paid on time. UK firms also paid over £180 million in unnecessary interest charges. It is clear, if we all commit to paying on time, we can help each other through these tougher times,” said Cadman.
Regional business minister, Rosie Winterton, said: “Prompt payment remains the biggest financial challenge faced by firms and was responsible for a staggering 4,000 UK companies going bust last year. It is critical that Government takes the lead and together with local businesses creates a better payment culture. That’s why in July, central Government departments paid £17 billion worth of invoices within 10 days. I want to see more companies paying fair and signing up to the Prompt Payment Code.”
If you are struggling with being paid for your services and require debt recovery services, contact Federal Management FREE on 0800 043 6922 now.