Could this law be doubled edged?

Yes they could and that would indeed be in the spirit of the act.

The purpose of the act is to encourage customers to pay on time and recompense suppliers when they are not.

If the customer had paid on time then the the supplier wouldn't have a claim.

The customer might use the threat of withdrawing business to stop a supplier asking for payment of the late payment charge.

However that supplier then has to spend time chasing payment, they have to employ credit controllers and they have cash flow costs caused by that late payment.

However that liability is hanging over the head of business customers.

You can't use the goodwill to get away with late payment because eventually when that relationship ends, the supplier can turn around and ask for that compensation.

Knowing this, nobody should want to pay late, nobody should view late payment as the cheapest form of cash flow.

If they need cash flow, they should use their bankers and not abuse their suppliers.

Hi Dave,

Yes I am sure this is correct.

I would certainly recommend you start paying your suppliers on time. Paying late, if only by a few days is (a) not right or (b) potentially expensive.

If you want to pay later, get your customers to agree to the later payment date. Don't just take advantage of their goodwill. It might evaporate.

The money should be in your suppliers account on the due date. So you probably need to arrange payment a few days before.

Really, I would reccomend paying an invoice as soon as it is approved. Don't make your supplier wait for payment on goods and services you have already had.

You expected them to supply as soon as possible, so why not pay as soon as possible.

But believe me this is the purpose of the law. To speed up payments and break the Late payment culture in this country that kills 50,000 small businesses a year and damages our productivity.

Imagine a world where business owners didn't have to spend more time chasing payments than they do on providing services. Think how much more productive we would all be if cash could be made to move faster through the system.





Don't push payments to the limit,