One in 10 businesses pay customers late when they are paid on time.
Research by the Better Payment Practice Group (BPPG) has found that nearly 11% of businesses would pay their customers late even if their own bills were settled promptly.

The poll, which was carried out on this website during September, asked businesses whether they would pay their customers late if they were paid on time. While the vast majority of the 615 respondents said that they would pay their customers punctually, the results reveal a worrying number of companies who believe that it is acceptable to delay settling their business debts even when their own cashflow is not being adversely affected by late payers.

The results correspond with the attitude of businesses a year ago when 10% admitted in a BPPG web poll that being paid on time would not influence them to pay their own bills on time

The BPPG recommends that companies incorporate credit vetting procedures into their standard credit management practices; checking a new customer’s creditworthiness before trading with them and then closely monitoring them during the early stages of the business relationship.

• Sources of credit information include:
• Status reports from credit agencies;
• Trade references;
• Company accounts, which can be found at Companies House;
• Register of County Court Judgments;
• Insolvency Service;
• Bank references;
• Friendly visits to the customer;
• Local intelligence (e.g. local newspapers, business networking groups).

Stephen Lewis, Member of the Better Payment Practice Group and representative of the Credit Services Association, commented: “Our survey should act as a reminder that it pays to undertake some research into new customers before issuing credit. Deliberate late payment is never acceptable and firms should do all they can to safeguard their own cashflow. Prior knowledge of a customer’s credit record can highlight the need for preventative measures, such as asking for payment in advance, to reduce exposure to late payment risk.”

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