How to beat late payments

To help SMEs in their fight, Bacs has produced five handy hints that every business owner should consider:

1. Credit check clients and suppliers up front. If you knew a company had experienced financial problems in the past, would you still give them 30 days credit?

2. Once you have signed a contract with a trading partner, encourage them to pay all invoices straight into your bank account by Bacs Direct Credit. Include your sort code and account number on invoices along with the message "Pay Me Direct". This small step can save time on payment reconciliation and queuing at the bank to pay in cheques

3. If you have prompt payers, why not reward them? Offer discounts to early payers encouraging them to keep the money flowing in

4. Get familiar with UK business law, especially if you have customers that frequently pay you late. In the UK, all business owners and managers are entitled to claim reasonable debt recovery costs and Statutory Interest under late payment legislation. For more information go to www.payontime.co.uk/legislation/legislation_main.html

5. Practice what you preach! Save your own suppliers time and money by paying them using Bacs Direct Credit. It's also worth settling your regular business bills by Direct Debit. This approach could help you negotiate better payment terms and avoid penalty charges on any overdue invoices or bills.

Find out more about Bacs and their services here