More UK businesses are taking advantage of new late payment laws, which are helping more bosses recoup overdue debts.
Research by the Better Payment Practice Group (BPPG) has revealed that 28 per cent of businesses have successfully charged interest on late payment under the new rules.
The figure represents an increase of 8 per cent, showing that amendments to late payment laws in August 2002 are proving beneficial to many businesses.
The amendments allow all business owners to claim late payment interest and reasonable debt recovery from other firms.
Small businesses are also able to work with representative bodies to challenge contract terms that fail to provide a remedy to late payment.
However, around two thirds of business respondents have never charged interest when faced with the problem.
Previous research by the BPPG revealed that most businesses had yet to place their faith in the legislation. Four out of five firms claimed that its main use was as a deterrent to late payment rather than a last resort to claiming debts.
Clive Lewis, head of SME issues at the Institute of Chartered Accountants in England and Wales, said: “The legislation was never designed to be used in isolation and is one of many credit management tools available to businesses.
“However, it is important that businesses are able to exercise their statutory right to claim interest under the legislation if they are not paid to agreed terms and it is encouraging to see that, when asked, the majority of businesses are paying these charges in full.”
