Late payments....guidance from the Federation of Small Businesses
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  1. #1
    Simona Guest

    Default Late payments....guidance from the Federation of Small Businesses

    The topic of late payments is one often discussed in our profession.
    We know it can cause problems in the sustainability of our business, cash flow, inability to honour our Direct Debits for the business and, in some cases, also credit ratings issues.
    We all deal with the late payments in a different way...the Federation of Small Businesses has some very useful guidelines
    The document also covers payments from LAs

    The whole document is one that has extremely useful information and I am sure will help us run our small businesses
    I would print and keep alongside our contracts.... please look at page 5 in particular under the 'proactive small business actions and recommendations' where it recommends a contract and a Prompt Payment Code...I find this very useful rather than a 'late payment policy':

    All transactions should be underpinned by a contract.
    This helps in confirming payment terms and penalties if payments are late.
    This can help in professionalising the business and can be adapted to each transaction.
    Further help on contracts can be found the Prompt Payment Code website


    I hope you find this useful...it may lead us to reflect on the worth of becoming members of FSB.

    http://www.fsb.org.uk/policy/rpu/lon...uly%202011.pdf

  2. #2
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    Very useful thank you Simona. I will read it properly later

  3. #3
    Simona Guest

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    Late payments are one of the most talked about issues in the 'small business community'

    Small businesses have a problem with sustainability if invoices are not settled on time.
    The vast majority of businesses do have a policy on late payments but often have to write off non payments altogether
    If you want to find out more look at 'Enterprise Rockers' and get their free newsletter.


    I wanted to get clarification on charges for late payments with the view to update my policy, see what we can do to and what charges we can ask parents to pay

    My PLI is provided by RSA...which also provides it for all the other associations apart from UKCMA who I believe use Morton Michel

    Please be aware I contacted the legal team ....not my Association....as they, nor any of the other associations, would have been able to provide this specific legal advice

    I was informed by the legal team and given several reasons why we cannot charge a penalty for late payments unless we can 'prove' we have suffered a financial loss as a result...one being going into overdraft and being charged by our bank.
    Should a case ever end up in a court this evidence would have to be provided
    I understood though that we can clearly state in our contract 'no fee equals no care'

    I also looked at the FSB website to look at their advice on this.
    I found the Prompt Payment Code an excellent suggestion and I have spoken to FSB twice.

    My advice is ...if in doubt...please make sure you know what you are covered for by your insurer
    All it entails is a phone call and will take 5 minutes of your time and then a short time updating your own individual policy on late payments.

    Hope this helps.
    Last edited by Simona; 15-04-2014 at 07:43 AM.

 

 

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