The business group said the UK Payments Council should revisit its decision to scrap a 2018 deadline for killing off the cheque, after the BCC produced research that found 94pc of companies are affected by late-paying customers, reports The Telegraph.
The BCC’s survey of more than 5,000 businesses also found that a “staggering” quarter of them said at least 40pc of their invoices were settled late. Separate research by Bacs, the payments company that runs Direct Debit, found that collectively, small and medium-sized companies are owed £36.4bn from outstanding bills.
The BCC said that widespread use of cheques by small companies “can have negative effects on other businesses’ cash flow”.
Last year, the Payments Council bowed to fierce opposition to its plan to phase out cheques from groups including small business lobbying organisations.
“The Payments Council should reassess the case for phasing out the cheque by 2018,” the BCC said.
The group said that while more than two thirds of small companies are typically paid by cheque, only one in five cite it as a preferred method of payment. Bank transfer was overwhelmingly the most popular choice
However, it acknowledged that many businesses still use cheques and they could only be scrapped “if businesses are not financially disadvantaged by the extra fees that can come with additional forms of payment such as internet banking transfers”.
John Longworth, director general of the BCC, also called for a “Kitemark” system to be created as “a standard that could be used by businesses acknowledged and regularly assessed as prompt payers”. Other suggestions included getting local government to move to electronic invoicing as standard to speed up payments.
“Businesses must also work together with the Government to ensure late payments become less endemic across the supply chain,” he said.
According to Bacs, the average amount owed to small and medium-sized companies stands at £36,000. The average company experiencing late payment has to wait an average of 43.4 days beyond agreed terms to have invoices settled. It estimated small firms are spending at least £700m each year just in chasing debts, with large customers typically the worst culprits.
The Government last week launched a consultation on how it will implement an EU law which says standard contract terms for payment should not exceed 60 days “unless otherwise expressly agreed and provided such terms are not grossly unfair”.
However, business minister Michael Fallon said: “Legislation alone cannot deal with the issue. Businesses need to make sure they have suitable measures in place to help themselves.”
