New EU late payment rules to protect SMEs

New rules to introduce maximum payment periods for public and private sectors should be quickly implemented and properly enforced to shield European businesses from the strain of late payments says Carole Hughes, managing director of debt recovery agency Daniels Silverman. “The European Parliament’s Late Payment Directive which recently won support from MEPs will introduce new […]

New rules to introduce maximum payment periods for public and private sectors should be quickly implemented and properly enforced to shield European businesses from the strain of late payments says Carole Hughes, managing director of debt recovery agency Daniels Silverman.

“The European Parliament’s Late Payment Directive which recently won support from MEPs will introduce new rules for a standard deadline for payment and will encourage companies to honour payments for goods or services in a timely fashion.

“The European Parliament’s Late Payment Directive which recently won support from MEPs will introduce new rules for a standard deadline for payment and will encourage companies to honour payments for goods or services in a timely fashion.

“If properly enforced the new rules will prevent debtors from imposing long payment periods and will help businesses to streamline credit management. They will also support debt collection procedures before late payments have chance to cripple businesses.

“The new rules set down a standard deadline for payment. The basic deadline for both public and private sectors to pay bills for goods or services will now be 30 days unless another date is fixed in the contract. Contracts between private sector businesses can establish deadlines beyond 60 days, if “expressly agreed” and not “grossly unfair”. Public authorities can only extend the deadline to 60 days if “objectively justified”, and can never go beyond 60 days.”