Scots firms facing too long wait for payment

More than one in ten Scottish businesses are waiting in excess of 60 days for payment, according to research by accountancy firm RSM Tenon.

Some 28 per cent of firms have to wait for between 45 and 60 days, while a further 36 per cent of companies have to wait 30-45 days.

Tom MacLennan, head of recovery at RSM Tenon in Scotland, said: "Managing cashflow is vital for businesses, particularly in the continued depressed economic climate.

"Late payments form a huge part of cashflow management and we saw many businesses go under in the past two years simply because they ran out of cash.

"Entrepreneurs should ensure that they set out clear payment terms, adopt credit control procedures and continuously chase slow-paying customers."

The accountancy firm said that companies should agree "realistic" payments terms with their customers based on "how quickly you have to pay for materials and provide services".

Firms should "make it easy" for their clients to pay by supplying bank account details for BACS transfers and credit checks should be carried out on all new customers, RSM Tenon stressed.

Accountants at the firm also advised suppliers to have "a clear procedure for credit control" and told them "don't be afraid to take action". RSM Tenon added: "It is also important to know who to chase for late payments and leave a trail by using e-mail and faxes in case you have to take collective action."