Nigel Woodhouse who runs TaxAssist Accountants in Doncastersaid:
"We know this is a very sensitive issue for small businesses as
customer relationships are critical, but when cash flow is being
stretched to breaking point, they should seriously consider taking
a firmer approach."
The call comes as latest figures show that unpaid bills owed to
small businesses by their customers are at an all time high.
Payments company BACS said the national figure rose by 10% in the
last 12 months to more than £33 billion. The worst offenders were
large companies and, according to BACS, the retail and distribution
sectors were owed the most.
"Many small businesses will have to rely on their overdraft to
cope with late invoice payments and they may also be paying VAT on
the debt - something they won't be able to recoup for many months
if the debt does eventually go bad. And many businesses are forced
to stall payments to other parties because they are waiting for
payments from their customers. So late payments have lots of
"Of course they will first need to consider their relationship
with the customer and look carefully at their own credit management
system, but they do have a statutory right to charge interest on
late payments- even if it isn't in their terms and conditions."
The Government recently announced plans to "name and shame"
large companies that fail to pay small businesses promptly, via the
Cabinet Office website.