Businesses across the country could be in for a nasty shock this month, as the Late Payment Directive takes effect warns Peter Lusty, Chief Executive of Strategix. The Directive brings forward the final phase of the existing three-stage Late Payment of Commercial Debts (Interest) Act thereby giving all businesses, regardless of size, the legal right to claim interest on late payment.

In a market that is seeing increasing growth in the SME sector, late payment has become a critical issue. Typically, an SME tends to operate within very tight financial parameters and having to carry a large outstanding customer debt can mean either defaulting on its own payments to suppliers or going out of business. Being able to penalise debtors who drag out the payment process could make a real difference to both operational efficiency and business survival.

However, it is not just that late payers who may be caught out. Any company without adequate systems to meet the business requirements of the Directive could find itself in difficulty when it comes to implementing even routine debt recovery procedures. Accounting and financial software must be updated in order to comply with the regulations.

"Businesses endeavouring to collect interest on debts - in line with the legislation - will need to ensure that their IT systems are spot-on. If your software vendor is on the ball and can update your technology, this could be a key opportunity to create business efficiency by improving cash cycles and reducing debtor days." says Peter Lusty Chief Executive, Strategix.

about strategix
Strategix is a leading European software house, dedicated to the development and rapid deployment of supply chain software.

We focus on the wholesale and retail distribution, logistics and service sectors where our software maximizes supply chain efficiency and accelerates customer service. Our systems are designed for reliability, availability and performance. Our customers enjoy a rapid return on their investment and genuine competitive advantage.

Focused on key growth sectors which range from high technology to household and building products, Strategix numbers businesses such as Fired Earth, Fuller Smith & Turner, Jewson, London Underground, MacLean Electrical, Midwich, Routeco, Virgin Mobile and Wolseley among its customers.

august 2002

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