Has it affected Credit Control and Debt Collection?
We are still in Europe…It is business as usual………
Whilst there has been an immediate impact on the property and building sector and an increase of instruction to LPL in these sectors, the impact seems to be more on new building and property ventures rather than being a legitimate reason to withhold payment on existing contracts. Within a small segment of this industry sector there has always been a problem area, particularly regarding retention arguments, QS sign offs and the like.
We always advise our clients to be prudent with all relevant paperwork and be diligent in chasing slow payment and establish reasons for non payment. Advice that we have been giving for many a year whether in or out of Europe.
Of course I cannot talk for the cost of exports being more favourable as the Euro strengthens or the general sway in exchange rates effecting businesses that export or import but at the moment as far as legislation is concerned, the UK is still in Europe and will continue to be subject, good or bad, to the rules and regulations currently in place.
In fact in my world of credit control The Late Payment Act, as with other legislation, has to be enshrined in UK law by Act of parliament and placed on Statute. Therefore any laws that are discussed in the future that this or subsequent UK Governments wish to abolish need to be repealed by Act of Parliament. A long and arduous process. As far as LPL is concerned and for commerce in general I do not see the need to repeal any Late Payment laws. It has, since inception in 1998 helped millions of businesses recoup collection costs, and has been the main single piece of legislation that has assisted in getting many slower payers back to proper and agreed payment terms as well as keeping local authorise and government institutions within agreed payment terms, thus assisting many SME’s in particular to regulate and manage cash flows.
So regardless of how any of us voted and the future political scene I am confident in predicting that there will be no sudden surge of late payment genuinely attributable to Brexit and there will be no unexpected rise in business failures and personal bankruptcy. Unfortunately there will certainly be those usual slow payers adding Brexit to their list of excuses for non payment but I think its business as usual for the next few years at least.
Stephen Lewis FCICM
Managing Director : LPL Commercial Investigations
Stephen is a Fellow of the Chartered Institute of Credit Management and served on the Board of the Credit Services Association for over 15 years, in which time he was president for three years, headed up the CSA Training division and served on the Government working party introducing late payment legislation to UK Statutes.