The Better Payment Practice Group finds that it pays to use the Late Payment Legislation

Research by the Better Payment Practice Group (BPPG), has found that 28% of businesses have successfully charged interest under the late payment legislation, up from 20% in a similar survey last year – a strong indication that the late payment legislation is helping firms to collect overdue debts.

However, approximately two thirds of the 747 businesses who responded to the poll on this website have never charged interest under the legislation. According to previous research by the BPPG, four out of five businesses believe that the legislation’s most valuable role is as a deterrent on invoices and reminders, rather than as a last resort for collecting bad debts.

Clive Lewis, Head of SME Issues at Institute of Chartered Accountants in England and Wales and member of the Better Payment Practice Group commented: “The legislation was never designed to be used in isolation and is one of many credit management tools available to businesses. However, it is important that businesses are able to exercise their statutory right to claim interest under the legislation if they are not paid to agreed terms and it is encouraging to see that, when asked, the majority of businesses are paying these charges in full.”

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