Can tackling late payment be taken too far?

22/01/19.

One construction worker, was so incensed by late payment that he decided to take matters into his own hands!

Well, into his digger!

The disgruntled worker drove his digger into the reception of the Travelodge hotel where he had been working after he was understood to have been driven over the edge by non-payment by his employment agency.

Merseyside Police were called on Monday afternoon when the digger was driven through the entrance of a Travelodge in the Liverpool Innovation Park.

The incident was widely shared on social media, however after the rampage the driver seems to have realised the consequences and “left the vehicle and made off on foot in the direction of Edge Lane.”

Police are appealing for information.

They added: “Merseyside Fire and Rescue Services and contractors attended to ensure the site was safe.”

(Video footage of the incident has been shared extensively online – warning clip contains some bad language)

At CPA we understand how late payment can drive people crazy.

Daily we speak to people who feel outraged by people who have the ability to pay but do everything they can to avoid paying.

And over the years we have heard and seen people try all sorts of things to tackle the issue.

We must admit, driving a digger into the reception of a hotel is a new one though.

Sadly, we doubt that causing criminal damage is  going to help his situation or speed up payment.

Perhaps he went too far?

How to really break the late payment culture

James Salmon, Operations Director at The Credit Protection Association said  “We understand that people are driven to their wits end by late payment but there are legal means to address it”

CPA provides the credit management tools to help business owners tackle late payment.

James Salmon added “late payment legislation also provides the tools to truly change the culture. Late payment legislation allows suppliers to go back six years (due to the statute of limitations) and charge compensation and interest on late payments that happened in the past. This stops late payment from being a cost free cash flow booster”

“How will this change the culture?”

“Business customers may rely on their trading relationship with a supplier to get away with late payment, but as soon as that relationship ends, they face the prospect of being hit with 6 years worth of late payment compensation. Once that relationship ends, the supplier is fully entitled to go and ask for that retrospective compensation.

“Therefore, why risk late payment? Why operate with the risky of a large penalty looming over them?  It would be better for them to pay on time and avoid that risk”

“They may not even end the relationship themselves, the supplier might get into difficulties and realise they have this large untapped asset in late payment compensation that is available to them. Or the supplier might just look at all the late payments over the years, the hassle of chasing and decide that the business customer is worth more to them as an ex-customer than they are as a current customer”

“At present, not many suppliers are insisting on this compensation  and therefore it is not at the forefront of businesses minds. The more suppliers pursue late payment compensation, the more it becomes main stream, the more businesses will realise that the culture of late payment is not the magical free cash flow machine they thought it was and that it does come with a potential future cost.”

“Once they discover that every invoice they paid late, no matter how small, could lead to a compensation claim of at least £40, even if it was only late by a few days, then they are going to want to change their operating procedures to avoid future claims.”

With larger late paid invoices being worth £70 or £100 in compensation and with interest calculated daily at 8 percent above base then the costs of routinely paying suppliers late could be massive.

“They should quickly realise that it is better to pay their suppliers on time and instead finance their business’ cashflow through more traditional means.”

This doesn’t just mean deciding to write a cheque or instruct the accounts dept to raise a payment on the day it becomes due. If the payment arrives late, the penalty will still apply. No, to avoid the claim, those business customers need to make sure the payment arrives on or before the due date.  If  it arrives one day late then the full compensation is still due under the legislation.

“If payments start coming in on time, then those suppliers in turn will them have the cash to pay their suppliers and so on and so on….  The chain of late payment can be broken. The late payment culture can be stopped. We have the tools.”

“This isn’t an attack on business. Getting cash to flow faster through the economy can only boost our nations productivity.”

“Imagine a world where businesses and business owners spent more time working on productive projects and less on chasing payments!”

“Imagine a world where business owners could turn round jobs faster!”

“Imagine a world where business owners spent more time planning growth and new products and services and spent less time stressed over cash-flow”

“Breaking the late payment culture can liberate our nations small businesses and small business owners!”

How can CPA help?

If you sell on credit and have faced late paying business customers, then we can help.

At the Credit Protection Association, our members benefit from our debt recovery and credit management services which give them the tools to avoid and battle late payments. Opening up the financial freedom needed to grow and prosper.

The compensation is claimable under * The Late Payment of Commercial Debts (Interest) Act 1998 (with amendments), with which CPA are experts and can give free advice.

Our new Late Payment Compensation company, CPA (LPC) Recoveries Limited however can help suppliers unlock hidden potential and recover the compensation due to their businesses.

Integrating the historic ledgers and calculating the claims is a complicated process but CPA has developed the systems to do it. We also have the experience and expertise to collect the compensation and overcome the various objections.

We are passionate about wanting to end the culture of late payment and want to work with suppliers who feel the same.

visit our late compensation page

See our full blog and FAQ on late payment compensation

Ready to speak to an advisor?

For help or advice on credit management, entirely without obligation.

Call us today

0330 053 9263

The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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