Small firms least tolerant of late payment
Tuesday 04 April 2006
Small businesses are the least tolerant of customers who pay late, with almost a quarter of small firms saying they would terminate a contract if a customer was late with their payment just once, according to a new study.
However 33% of respondents to a recent survey by the Better Payment Practice Campaign (BPPC) will still allow a customer to pay late five times or more before they would consider terminating the contract.
“Too many businesses in the UK are relying on extended credit from their suppliers to sustain their cashflow and are not giving proper consideration to the potential damage they are inflicting on these important relationships,” says Nicholas Bojas, senior policy adviser at the CBI and BPPC member.
Small firms are advised to consider the risk to their cashflow of condoning late payment and strengthen their credit management procedures to protect themselves from customers that pay late.
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