READERS are split on how effective legislation is in preventing clients from paying late for services.
Of the 103 Accountancy Age readers polled, 45% felt companies are generally able to ensure prompt payment, while 51% said there is no way legislation would ever work due to the power held by key clients.
Just 2% said the law works excellently, while the same number felt that with a few changes it would function successfully.
The Department of Business, Innovation and Skills (BIS) and the Scottish government are consulting on changes to legislation regarding late payments to SMEs to comply with an EU directive, to be implemented by March 2013.
Research from BACS in July this year suggested that more than one million SMEs are facing late payments, with the average SME owed £36,000. It also claimed late payments were, on average, 43.4 days overdue. More than a third (37%) of the 478 SMEs surveyed for the report named large businesses as the worst culprits, though 25% said fellow SMEs were most guilty.
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