Late payments are a pain for all of us, clapping the irons on our cashflow, disrupting client relationships and generally causing a world of stress until they're resolved either directly or through the intervention of a debt collections specialist like Safe Collections.
But on an international scale, late payments cause even bigger headaches for economies across the EU, leading to an annual debt of €23.6 billion (£19 billion) according to European Commission figures.
Nearly half a million jobs are lost as a result of these debts, putting 450,000 European citizens out of work, while in the last year alone, the proportion of businesses who struggle with liquidity because of late payments has risen by ten percentage points to reach 57%.
Bankruptcy is the only option for dozens of small to medium-sized businesses throughout the EU on a daily basis, if they don't contact Safe Collections and other such debt collections firms in time - but the European Commission is working on an alternative to ensure SMEs can not only survive, but thrive in the years to come.
The Late Payment Directive
The deadline for the introduction of the Late Payment Directive (2011/7/EU) is March 16th 2013, but the European Commission is pushing to introduce the new legislation ahead of schedule where possible, in order to protect the interests of EU SMEs.
"Late payments can lead to high costs in terms of time and money, and a dispute can sour relationships with customers. The Directive provides a legal framework for pursuing debtors," the Commission explains.
It also adds that, while enterprises have the option of whether or not to pursue their debtors, or to vary their terms of payment if they so wish, public authorities will be obliged to adhere to the legislation as set out - including the rules on statutory interest rates, and so on.
Content continues below
A fine example of how not to carry out debt collection appeared in Singapore newspapers this week after three men were jailed for their part in a farcical incident. Andra Chew Keng Leng, 40, Lim Boon…
New York publishing house Condé Nast has reportedly come up with a novel solution to the tricky issue of ensuring its contributors get paid on time. As reported here, the magazine empire behind…
When working with clients who are based overseas, there are several things you should take into account - ideally, from the moment you begin working for them, rather than later in the process when…
When Tesco was exposed for its long payment delays, it exposed an ugly trend among large businesses: delay, delay and delay some more, until your supplier is on its knees. And while the supermarket…
Counting the Cost
Imagine what the EU could do with an extra £19 billion in circulation, rather than sitting in debtors' company accounts earning interest until specialists like Safe Collections manage to get the full amount of each invoice handed over.
It's enough to build about 24 more Wembley Stadiums - that's very nearly one for each EU Member State.
You could cover nearly a fifth of the NHS's total annual budget, keeping free healthcare available for more than two months in the UK, or for two and a half days across the entire EU.
Or you could repay the UK's deficit, allowing the country to go around five weeks without any need for government borrowing.
But the real value of getting these funds into proper circulation is much greater than £19 billion, because once they're in a supplier's account, they can be paid on to their supplier, and so on up the chain.
They can be paid to individuals as wages, and be used to buy food or pay rent and mortgage costs.
Like it or not, the ceaseless flow of money between individuals and institutions, from major stock market transactions, to a fiver hidden in a birthday card, is a part of modern life.
Money makes the world go round - and when the money stops moving, we all pay the price, in the UK, across the EU, and beyond.
That's why Safe Collections pursue claims internationally, throughout the EU, as we have been doing for years already.
With the incoming Late Payment Directive, the whole of Europe should be working on broadly the same legislative basis, making it easier still for us to claim the funds that are rightfully owed to you, wherever on the continent your debtor may be located.
Over 150 Years Of Industry Experience
Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.
Image "Bankruptcy" by flickr user Simon Cunningham is licensed under CC BY 2.0