The total amount of money owed to one-person businesses may have fallen, but the time it takes to come in to them is continuing to rise, new figures reveal.
Figures by BACS Payment Schemes, the outfit behind direct debits, show that small traders wait an average of 41 days longer than their contractually set payment terms.
This represents an extra 9.5 days on the time small businesses had to wait to get paid six months ago, found the survey of 467 companies seen by the Financial Times.
The increasing delay, which were most likely in the south, was blamed on big traders, who were the culprits for 37 per cent of the firms waiting after the 'due date.'
Perhaps less ominously, the BACS records also show that the total amount owed in late payments fell from £30.4billion in June last year to £24bn in December.
In turn, the average amount owed to small businesses over the same period reduced, by an average of £3,000, although this figure is thought to exclude any interest.
Lawdit Solicitors say that small traders, like freelancers, are entitled to charge interest on a contract to which the Late Payment of Commercial Debts Act applies.
The act applies to contracts for the sale of goods, or a contract (other than a contract of sale of goods) by which a person does any or any combination of:
i) transferring or agreeing to transfer to another the property in goods;
ii) bailing or agreeing to bail goods to another by way of hire or, in Scotland, hiring or agreeing to hire goods to another
iii) agreeing to carry out a service
Paul Bicknell, partner at Lawdit, said: "Therefore if your contract falls within points (i)-(iii), then it will be a contract which you are entitled to charge simple interest."
Apr 19, 2010
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