Partner Article

‘Trip Advisor’ proposals miss the point about late payment

Says Charles Wilson, CEO of Lovetts

www.lovettsco.uk

Vince Cable’s ‘Trip Advisor’ style proposals for naming and shaming late payers once again miss the key point about tackling late payment says Charles Wilson, CEO of Lovetts PLC, the commercial debt recovery law firm.

Charles Wilson says: “While this is an improvement on the proposal to impose fines announced in August, I am not convinced a review site like Trip Advisor is going to spur businesses into paying their invoices sooner.

“Late payment is too ingrained in our business culture for many businesses to be overly concerned by a poor review about their payment performance. Rather the opposite in fact - sadly, many see it as a badge of honour. I really would argue again, that the key point about tackling late payment is establishing a good working relationship at the outset. Set your terms and conditions out clearly so that customers know that late payment is not part of the deal.

“For instance, too little is done by business to demonstrate value, not just price, at the start of a relationship. If SMEs contracted on the basis that the customer really valued their contribution, treating the contract as a form of partnership and showing what has to be gained beyond the provision of pure commodity then I firmly believe the customer is more likely to pay on time. If everyone just chases sales, without strong relationships, and without setting down clear deal-terms, then there’s less motivation by big companies to pay. Corporate commitment must be exacted at contract stage. SMEs are generally united in being innovative, agile and highly focused on service – they need to demonstrate these qualities in spades to support improved relationships with big customers.

“At the same time, Government needs to focus resource in educating SMEs on how they can exploit every tool in their armoury to protect their cash flow and limit their exposure to late payment. This means, for example, giving wholehearted support to the many initiatives of organisations like the Institute of Credit Management”

Ends

November 2013

Notes to Editors

Lovetts Plc is one of the UK’s leading law firms whose sole line of business is the recovery of overdue debts and any commercial litigation resulting from debtor/creditor agreements. Through this specialism and over 20 years in the debt collection industry, Lovetts has developed industry leading software for the efficient management and prompt recovery of debts, both in the UK and overseas.

Lovetts was the first UK law firm to become a Public Limited Company, in 1994. For further press information please contact Jen Thorneywork or Alison Reeson at HSL on 0208 977 9132 or email lovettsteam@harrisonsadler.com

This was posted in Bdaily's Members' News section by Charles Wilson .