With late bill payment topping the list of woes for businesses of all sizes, faster than expected implementation of new late payment legislation could offer some relief.
Originally planned for introduction across European Union member states in 2013, the European Commission has urged member states to implement the directive much earlier.
The new rules will require both private and public entities to pay invoices within 30 days. Whilst parties can agree to extend this to 60 days, any longer payment period may be rejected as “grossly unfair”.
The UK has already shown a willingness to speed up adopting the legislation after business minister Ed Davey indicated that legislation could be adopted as soon as the first half of 2012.
But businesses need not wait until the new rules are implemented to tighten up recovery of their payments. Well drafted standard trading terms and conditions can establish payment periods and late payment penalties so it is clear from the outset when payment is expected. Terms and conditions can cover a wide spectrum of the contractual arrangement and are something no business can afford to ignore.
Sounds like very good news! Some US colleagues tell me that they add an extra percentage to the bill for late payment. Is this something that we are allowed to do in the UK?
ReplyDelete