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Electronic payments may help the 94 percent of companies who suffer from late settlement

Published on Monday, October 01, 2012

The Payments Council has been urged to reconsider decision not to scrap cheques as the British Chambers of Commerce (BCC) unearths worrying trends for late payments among UK businesses.

The survey, of more than 5,000 companies, finds that small and medium-sized businesses are owed over £36billion, with almost half of all invoices settled late - the average time being 43 days after agreed terms. Cheques bear the brunt of criticism and only 20% of companies cite it as their preferred payment method.

Late in 2011, an alliance of industry bodies called for rules to 'name and shame' large companies who consistently pay their suppliers late. That came after the Payments Council bowed to concerted pressure to reverse their scheme which aimed to phase out the use of cheques by 2018. The BCC has called for electronic payment methods to help automate payment processes and reduce the delay between invoicing and settlement.

Another suggestion is for promptly-paying businesses to be recognised by a service quality certification mark, similar to the Kitemark used by the British Standards Institution.