Call us on 01752 203500
News & Features

Thursday 8th July 2010
08/07/2010 - SME's late payment
 
SMEs could do more to tackle crippling late payments, says Peter Baulf from city Solicitors Gill Akaster LLP.
 
Small and medium sized enterprises (SMEs) in the UK are overlooking ways to protect against potentially crippling cash-flow problems, warns Gill Akaster.
 
SMEs have to wait an average of 41 days longer than the time scale for payment agreed with their customers before receiving payments, while £24billion is owed to SMEs at any one time. Recent research shows that that 37 per cent of late payers take between one and three months to pay invoices.*
 
With the increase in VAT to 20 per cent expected to worsen the SME cash flow problem, we are urging small businesses to guard against late payment.
 
Peter says that not enough businesses are aware of the protections available to them which safeguard against cash flow blockages. Solicitors will be able to help SMEs take advantage of these.
 
Peter Baulf, Litigation Solicitor says:
 
"Average commercial debts caused by late payments are high in the UK, and for SMEs a lack of cash flow can be crippling. With credit less available to those businesses from banks, late payments have a far more serious consequence for SMEs.
 
"Considering the amount of red tape SMEs and start-ups are faced with, it is no surprise that seeking protection against late payment from customers does not come top of the to-do list. However, it could be the difference between the business surviving or not, especially in the uncertain economic climate.
 
"A carefully worded contract drawn up by a solicitor between a business and their commercial customers can include clear terms on late payments, including penalty clauses and strict time frames for payment. Such terms can act as an effective deterrent for late payment and encourage timely payment for services, thus avoiding these terms coming into play."
 
Peter also says that contracts between businesses which include late payment clauses need to become a common feature of the SME market. The European Union is currently looking at updating a directive aimed at tackling late payments such is the impact on the SME sector across Europe as a whole.
 
Mr Baulf adds: "Many smaller businesses perhaps felt the recent budget did not do enough to tackle cash flow problems head on, and although the EU is looking at it, the safest bet is to protect against cash flow blockage between the customer and the business with a solid, solicitor-drafted contract."
 
Avoiding court
 
The Law Society and Gill Akaster Solicitors say that should SMEs and start-ups hit problems with customers failing to meet payment deadlines, court is not the only next-step option. Alternative Dispute Resolution and mediation are alternatives for SMEs.
 
Mr Baulf says: "There is a presumption that going to court is the only course of action when late payments cannot be resolved. However, many solicitors specialise in ADR and mediation, which can prove an effective way of solving the problems for SMEs and other businesses. ADR and well-drafted contracts can be effective in avoiding the last option, going court."
 
Ends
 
Notes to editors:
 
Figures sourced from Bacs www.bacs.co.uk research (December 2009) and the Forum for Private Business www.fpb.org.uk
 
Contact Peter Baulf of Gill Akaster LLP on 01752-203585.
 
 
 
 
 
 

YOUR LEGAL CHAMPION

News & Features
16/01/14 - Challenge to Vegetarian Will a Fruitless Endeavour
16th Jan 2014

A rather bizarre will dispute hit the headlines recently. This case, although most certainly unusual, goes some way to highlight the need to have a professional involved when ... click for more

13/01/14 - Send in the Sherriff!
13th Jan 2014

Here in the Gill Akaster office we are big fans of the popular BBC series ‘The Sheriffs Are Coming’ and today the third series will be hitting our TV screens.

T ... click for more

03/01/14 - D-Day 2014
3rd Jan 2014

Did you know that 3rd January has been dubbed ‘Divorce Day’ by many people across the UK?

With the start of a new year, often comes a time for new resolutions a ... click for more

18/12/13 - GOD TV Puts Faith in Plymouth Law Firm
18th Dec 2013

Plymouth-based law firm, Gill Akaster LLP, today (18 December) announced the completion of a significant deal for its client, The Angel Foundation (the UK charitable arm of GOD TV) allowi ... click for more

12/12/13 - A STEP Forward for Plymouth Solicitor
12th Dec 2013

Jonathan Hall, partner of Plymouth based law firm Gill Akaster LLP Solicitors, has been awarded the STEP (Society of Trust and Estate Practitioners) Advanced Certificate in Trust Disputes ... click for more

13/11/13 - Joint Accounts Routinely Frozen if Mental Capacity Lost
13th Nov 2013

Couples with joint bank accounts may find that their account is frozen if one of them loses mental capacity. Guidance issued this year by the British Bankers’ Association says that ... click for more

28/10/13 - Fines could be on the Cards for Landlords Renting to Illegal Immigrants
28th Oct 2013

It is widely covered in the media that the coalition government is looking at ways to reduce the number of illegal immigrants living within the UK. Recent proposals, which could be implem ... click for more

30/08/13 - An Extra Birthday Hug for Henry
30th Aug 2013

The plight of four year old Henry Hallam has had such an impact on the staff of a local law firm that his charity, Hugs for Henry, has been voted as its charity of the year.

... click for more

30/07/13 - New Partner Joins Plymouth Law Firm
1st Aug 2013

Plymouth based law firm, Gill Akaster LLP, has expanded its team by welcoming experienced employment solicitor Rhiain Lewis as a partner of the firm.

Rhiain boasts 25 years ... click for more

24/07/13 - Up Coming Changes in Employment Law
24th Jul 2013

There is no doubting that employment law is one of the fastest paced legal sectors in terms of rate of change. If businesses fail to comply with any of the changes implemented then the im ... click for more

16/07/13 - The Real Deal
16th Jul 2013

Plymouth based law firm, Gill Akaster LLP, has helped a local couple to achieve their ambition to establish an environmentally friendly cafe within Sutton Harbour.

Gill Aka ... click for more

24/06/13 - The Benefits of Being a Trustee
24th Jun 2013