Businesses failing to protect themselves against late payers

Many businesses are failing to take simple steps that could protect them against late payers, according to research by the Institute of Credit Management (ICM).

A survey of ICM members found that a quarter of them don’t use the payment performance data provided by B2B credit reference reports.

Researchers also found that two thirds of businesses don’t share payment performance data about their customers with credit reference agencies.

This is in spite of the fact that three quarters of them rely on such information when making their own decisions about whether to offer credit.

Philip King, the Chief Executive of the ICM, said he found the attitude puzzling. “You would expect both positive and negative information to be passed on so other businesses can benefit from the agencies’ reports.

“Instead, it just builds up a confused picture of many businesses’ finances and can result in more companies not getting paid.”

It is, of course, important to take precautions to reduce the risk of dealing with late payers and, in more extreme cases, people who default on their debts.

In reality, however, even the most stringent precautions won’t eliminate the problem completely.

When faced with late payers, it is important to take legal action as soon as possible to ensure settlement. Even something as simple as a solicitor’s letter can be enough to secure prompt payment.

Please contact us if you would like more information about credit control and debt collection.