View Full Version : Is Britain the Late-Paying Capital of Europe?

6th Mar 2006, 22:01
Good day to all.

Well, is it?

Every year you seem to read news in the financial pages that HM Govt. plans a clamp-down on late payers, but from where I’m sitting, it seems that certain firms operate a company policy not to pay up until you issue a lawyer’s letter, or apply for a CCJ (the larger the firm, the more endemic this policy usually is…I won’t name names…)

I wonder if the Govt. are friendly with factoring concerns, and wouldn’t want to put their slimy pals out of a job…(Tell me what a factor can do that you can’t? Is it worth the commission? I suspect they prey on the fears of small businesses…)

GB must have the highest concentration of factoring concerns in the developed world… But what are you to do? Is it possible to run a company (if we’re talking goods rather than services) purely on a pro-forma basis? If your product is *desirable* enough I guess you could…but what would the practical drawbacks be? If they’ve paid upfront for something, surely there’s more impetus for them to push it?

There are firms that I buy from purely on a pro-forma basis (I don‘t have the time for their paperwork to set up an account: 2 references, DNA sample, dog‘s maiden name etc), and I don’t have a problem - will others if I do the same to them?

I should confess that I run a one-horse operation, and it would make life easier if I had a “Mr Nasty” to deal with late-payers as I feel the recourse needed to handle LPs soils future relations. You could say “who needs them if they’re late-payers?”, but the big firms tend to place the larger orders…

Any comments will be studied.

Thanks in advance.

Mr Lexx
6th Mar 2006, 22:43
In a modern business world, unless your product is in high demand and you have the worldwide patent for it, you will not survive on a proforma basis only. I work for a big American company and we are currently being squeezed by 2 competitors who have decided to sell at just above (or at) cost and offer 60-90 days credit. I am not sure if they know we have a lot of reserves and can play this game for years.
I digress though, yes we are a late paying culture, but it works. The companies that wait for the solicitors letters and ccj's start to find that potential suppliers will not let them have a credit account to start with, let alone abuse it.


6th Mar 2006, 22:50
I worked for the (very) large UK Division of an EXTREMELY large International organisation. We were doing experimental testing work for Britain's (then) largest defence Industry. We needed fluids to operate this equipment, which would require us to install storage tanks, however there was a one-man business nearby who already had the necessary facilities to supply this fluid. I approached him and he was 'delighted' to accomodate us (it would mean greatly increased turnover for him). 'My' company was grateful as it saved them capital expenditure. However, as a 'casual' supplier he was made to wait (and wait) for his money, and he was eventually forced out of business (by then our tests were completed) due to disastrous cash-flow (he still had to pay HIS suppliers). If I'd known I'd never have suggested the arrangement!

OTOH, a sole agent for another fluid (another one-man business) hit pay-dirt when my company changed-over to this brand. His part in the deal was to sign the delivery notes of the bulk-tankers before they arrived at our plant, then sit-back and receive his commission regularly from the fluid manufacturer. IF cheques didn't arrive, he merely had to refuse to sign the delivery notes on the next consignment.

7th Mar 2006, 13:06
Thanks for the comments.
Having spent the last couple of hours going through unpaid invoices, I'm now feeling seriously depressed... If people paid up on time, my business wouldn't have any problems; as it is, it looks like I'm going to have to arrange an overdraft purely to accommodate late payers... My bank charge to arrange an overdraft btw, and the interest isn't good either (I've been with them years btw, otherwise I'd change, although I don't think any bank is ethical)

I was right about the UK being the worst payers in Europe btw - try Googling "Experian UK worst late payers Europe"


I guess a cool head is needed for business; at this moment I feel like ringing up the LPs and telling them their debts are being handed over to a collection agency... Not that I would support parasites such as agencies or factors.

Why was I born in the UK...

I think Pro-forma is the only way out for a small firm... 7% to a factor...parasitic's the word... :*

Thanks again.

Evening Star
7th Mar 2006, 13:34
In a word; yes.

Do some consultancy through the University (supplements the groats you know). Now, as I watch our billing side very carefully, I know when our invoices go out and when payment arrives. The results are pretty shameful. Suppose I could apply the letter of the law, but that would be a way of losing a client. Record so far is over a year to be paid, although as most apply a 'pay when paid' policy it is only non-business clients who pay up within a month.

And then these same companies loudly trumpet when they are the victim of sharp practice. In a way, they set the example.

Rwy in Sight
7th Mar 2006, 13:37
Try going to Bulgaria. All invoices are settled in cash and no credit is given.

However I have had exprience in a situation like this where the company (the national branch of the largest of its sector globally) was experience difficulties in receving payements from its distributors. And managment was doing nothing from fear of loosing market share and customers.

Rwy in Sight

7th Mar 2006, 13:56
I'll name & doubtless not shame. B&Q just doubled their supplier terms to 90 days. We just said seeya - value us, value our terms. Lucky for me, we don't need their work. There's legislation in the UK that says you can charge 8% above base rate for overdue debts. Just try it & see what happens - bye bye customer. The only answer is to legislate 30 days across the board & I'll see you on Barbados when that happens.

7th Mar 2006, 15:17
By Irish standards UK customers pay at lightening speed.
The last cheque we got was for twenty guineas, ten shillings and thruppence three-farthing.
The Irish transition to the euro went smoothly because no-one has yet paid any debts incurred since 2001.

7th Mar 2006, 16:51
Very true - however, you've obviously never done any work in Italy and tried to get paid for it. There is one Italian alternative to that, though - pay on time for about 6 months, building the business up, then not pay you at all.

Krystal n chips
7th Mar 2006, 16:59

I can more than empathise with your predicament---so you might like to try this lot to add some muscle to your claim--depends on the amount of course and if you wish to retain the customer.


As for Banks and Bank charges :mad: :mad: :mad: :mad: When the f££k are these parasites actually going to enter the 21st century with the time to process money being credited----3 working days for BAC and 5 working days for cheques----if you're lucky that is.

7th Mar 2006, 19:53
Well, my last employment was with a Russian company.

I approved and signed all invoices for payment and.....

Oh MAN! I knew I was supposed to keep my...:\

I'm SOOO sorry. Really... I:sad:

7th Mar 2006, 20:58
Thanks to all :ok:

As Evening Star suggests: how many of the larger firms / clients will use you again if you apply the letter of the new law designed to counter late-payers? The legislation's a joke...

Surely if the Govt. were serious about stopping LP practice, they'd implement a concept whereby anyone paying more than a fortnight outside of the agreed period was committing a criminal offence... Why not? I can only assume legislation like this would lose the banks several billion a year in loss of factoring / overdrafts etc, and if it comes down to legislating in favour of small business or Suited-Psychopaths-PLC-Bank, the Govt. will always pander to their pals in the latter example...

Para, the stories I could tell about that DIY store... (friends have sold to them...) Toe-curling ain't the term... Abuse of market power.... If you stop selling to them, they will sell copies made in the Far-East that breach copyright - are you going to take them on? They'll eek out the courtcase until you run out of funds... One fellow who found himself in this situation had to sign over damages to the legal firm who represented him...at least they're not selling the copies, so he wasn't entirely upset.

Thanks again.