More businesses see late payment legislation as a deterrent
Research conducted by the Better Payment Practice Group (BPPG) has found that more than three quarters of businesses now believe that the Late Payment Legislation should primarily be used as a deterrent.

The poll, which was conducted on the BPPG website, www.payontime.co.uk, during October, asked businesses whether the most important and effective application of the late payment legislation was applying for and getting compensation for late payment, or using it as a deterrent on invoices and reminders. A resounding 77% of the 512 respondents said that the legislation's most valuable role is to discourage late payment. This is a marked rise on last year's survey, when only 68% of respondents felt that the legislation was best used as a deterrent.

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 designed to be used as a deterrent against late payment, rather than as a last resort when faced with unpaid debts, so it is reassuring to see that an increasing number of businesses are seeing it as a way to avoid overdue invoices."

He continued: "We would encourage businesses to include their right to claim interest and compensation as part of their standard terms of trade and on their invoices. This sends a clear message to their customers that they take the matter of prompt payment seriously."

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