Publication of the survey results with regard to the working of the Late Payment Legislation was interesting (FDs slate late pay legislation, p1, 26 April).
As a financial controller in an SME with strong relationships with one of the largest corporates in the country, I constantly come across this issue. Saying you will charge interest has use as a threat from my credit controller, but once the chasing reaches a certain level, customer and supplier are aware this is an empty threat.
The added burden on the supplier is far outweighed by the slim chance of recovering the charge. Both parties know this and internally you come under pressure to placate the customer for fear of losing business. In the current climate to lose a customer on the basis of being aggressive in charging interest is a real risk.
FTSE companies should be fined by the government for non-compliance with the regulations. Small SMEs do not have the clout nor the inclination to make this work for themselves – we need help from the government.
Another solution is that the DTI could pay for the interest and then claim it back from the corporates using their infrastructure.
The threat of interest payments would then be real and although the upsetting of the customer/supplier relationship is still a risk, more SMEs standing up for themselves would make it more accepted and these statistics could be published so shaming the FDs/FCs of these corporates.
Gareth Huxtable, Wokingham.
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