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A small minority of company directors of UK business are claiming their legal right to charge interest against late payers, according to new research.
A report by commercial credit agency Graydon, revealed that only four per cent of companies always impose interest on late payers.
Despite this small figure, invoices being settled late is still a problem for many UK businesses, especially for small firms who are hit particularly hard when bills are not paid.
The study revealed that Scottish businesses pay their trade suppliers the fastest while the Midlands made bottom of the list.
Some 32 per cent of small business entrepreneurs rated late payment as their greatest nuisance, according to research released earlier this year by UK Business Forums.
To combat this problem, legislation was introduced in 1998 to allow companies to charge trade customers statutory interest.
Martin Williams, managing director of Graydon UK told Business Zone: "While we must try to understand why suppliers are not seeking to enforce their legal right to be paid on time, it is equally important to try to bring about a cultural change in the behaviour of finance departments across the country."
Mr Williams added that many departments ignore the socio-economic impact of late payments on trade suppliers, instead focusing on the "financial benefits that accrue to their own bottom lines by following this policy".
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