The lawyers at Off To See My Lawyer draft contracts for the sale of goods and provision of services, which protect the liability of our clients and their businesses; and in-so-doing we make sure we abide by any laws that safeguard consumers’ rights. A well-drafted contract, however, is not necessarily the end of the story.
The Forum for Private Business lobby group recently surveyed 500 small businesses, and found that 16% have nearly had to close, due to late payments by customers. 51% stated that late payment was a problem for them. Many small businesses rely upon their customers to pay on time, in order for them to be able to pay their own suppliers. In cases where payment to the suppliers has been delayed in this way, 45% of the businesses surveyed said their profits had eroded as a result; and 23% said it had limited their ability to invest.
Gordon Skaljak (Spokesman for credit insurer Graydon), suggested that legislation needs to be changed in order to protect small businesses: “The business community and the government must join forces to protect companies by stamping out the UK’s late payment culture.”
One small business owner, Gordon Bennie (of Blue Orchid) contacted his local MP, (Michael Comarty) after experiencing cashflow problems when his customers had failed to pay on time. The pair have been working with the Forum for Private Business, and together they successfully initiated a meeting at the House of Commons (on 25 April 2012) between officials from the Department for Business, and representatives of the Labour party, Lloyds Banking Group and various other professional bodies. Of course, legislation takes time to draft and implement, so we cannot expect a positive change any time soon.
If your business has been suffering due to late payment by a customer (or indeed by another business), please contact Off To See My Lawyer and we can advise you on ways to enforce the contract by demanding payment, without the need for litigation.