When a client starts to miss payment deadlines and debts mount up, it is natural to start to wonder - do they have the means to pay?
When companies get into financial difficulties, it can leave suppliers who are owed money in a tricky situation. As the saying goes, you can’t get blood out of a stone. If a business does not have any ready money available, debts will go unpaid.
The Scottish government has been forced into an embarrassing admission after it was revealed that it fails to pay a fifth of invoices on time. After the late payments figures were made public by the Scottish Labour party, the ruling SNP’s Finance Secretary Derek MacKay had to confirm they were correct during a Parliamentary session at Holyrood.
Read more: Scottish Government Shows Good and Bad Side on Late Payments
The government has ordered all large businesses to disclose information on payment practices as it seeks to crackdown on late payment culture. From April, all enterprises which meet the qualifying criteria face a statutory Duty to Report information including the average time taken to pay invoices and details of payment dispute protocols.
The reports, which must be submitted twice a year, will be published online, giving suppliers access to critical information on the payment practices of potential larger clients.
In today’s economic climate, business customers and clients are increasingly asking for - and in many cases expecting - credit from their suppliers.
There are obviously many benefits to offering credit. It shows a willingness to be flexible which fosters stronger business relationships, and it helps to secure or keep important contracts. Used properly, extending credit for goods and services can give your business a competitive advantage and boost income.
