The payment practices of the UK's biggest companies have been under scrutiny for a while now, with voluntary efforts such as the Prompt Payment Code attracting criticism for being 'toothless' in terms of enforcement action.

Meanwhile though, nobody really wants to see a situation where it is mandatory to take late payers to court, or to enforce penalties and interest - after all, sometimes you might simply want to extend the deadline as a gesture of good faith to a valued customer.

Read more: PLC Payment Practices and the Small Business Act 2015

When it comes to avoiding bad debt the old adage "prevention is better than cure" is a very useful rule to follow. As we tell any business owner that will listen, it is absolutely imperative that before you extend a customer credit you answer the following questions:

• Does this customer have the financial means to pay?
• Are they prepared to pay promptly or at all?

Read more: Bad Debt - Prevention is Better Than Cure

The UK's small businesses are facing even longer overdue invoices than at the worst point of the recession, according to figures from ABFA.

In a report published earlier this month, the Asset Based Finance Association revealed that, in 2009 when the recession peaked, firms with turnover of less than £1 million per year were waiting on average 61 days for invoices to be paid.

Read more: SMEs Hit by MORE Overdue Invoices Since Recession

Hardly a month goes by without a new government or industry scheme aimed at preventing late payment - since the EU Late Payment Directive was introduced, we've seen the voluntary Prompt Payment Code, proposals to name and shame poor performers on a public database, the Supply Chain Finance Scheme to raise funds against outstanding invoices, and several suggestions of new conciliation schemes.

Read more: Is 'Quick and Cheap' Best for Preventing Late Payment?