The Big Question - FDs ignore late payment rights
Finance directors are set to ignore the right to charge custo-mers interest under the govern-ment?s new late payment Act.
The Late Payment of Com-mercial Debts Act will come into force on 1 November. It allows businesses to charge interest of 8% above the base rate on late bills. For the first two years, these powers can only be used by small businesses against large companies.
But the Big Question survey, carried out by Accountancy Age and Reed Accountancy Personnel, found 51% of FDs said they would not charge late-paying customers interest.
Paul Suter, FD of motor dealer Harwoods, said: ?Charging interest will only damage relationships with customers.?
Michael Woodisse, FD of laboratory equipment manufacturer Grant Instruments, said: ?The act is too inflexible.?
Among the 30% of FDs who said they would make use of the act was Graham Mill, of industrial water treatment service Ecolochem. ?We welcome any initiative that helps us recover money in a timely fashion.?