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Late payments for small firms still a priority for FSB

The problems associated with late payment by debtors continue as policy priority for FSB. In the Spring Statement The Chancellor acknowledged that action needs to be taken. In the meantime eight in every ten businesses suffer from late payments and the associated effects on cash flow and the time taken up in chasing those debtors that are slow to pay up.

A question sometimes asked relates to the naming and shaming of slow payers and if it is to be recommended or avoided. Social media has made it easy to tell everyone just how annoyed you are with debtors that are not paying their bills, but is naming and shaming a late-paying customer in this way a good idea?

We asked FSB member Samantha White, of My Credit Controllers Ltd, a debt collection and outsourced credit control business based in Lincoln for her views.

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Samantha(pictured above) said: “Going public with your feelings about your customer might make you feel better.  Perhaps you even see it as a public service to help make other business owners aware. However, I strongly believe that you should keep your grievances to yourself.  There are better ways to work behind the scenes and bring in the payment and there are good reasons not to wash your dirty linen in public.”

“It could even be the case that there may be good reasons why the customer has not paid. They may not have received your invoice, or it may have errors. It could be embarrassing to go public, only to discover later that there was a reasonable explanation. There is also the risk of legal action, as happened to freelancer Lesley Kemp. Lesley who took to Twitter to criticize a client that failed to pay promptly for translation work ended up on the wrong end of a defamation case claiming damages of £120,000. Then there is reputation to consider. Would you want to trade with a business that takes to social media every time it has a disagreement with its customers?”

“Finally, I would not advocate naming and shaming your debtors. I believe it is almost certain to annoy your debtor and lower your chances of collecting an overdue invoice. If you have a problem with an overdue invoice why not look for professional outside help instead?”

Members are encouraged to check out the services provided by FSB Legal Hub and FSB Debt Recovery