Despite the high number of non- and late payers, only one in 20 companies uses the services of a collection agency. Most find that route too expensive in relation to the sums recovered; others fear it might be seen as heavy-handed and scare away customers. However, one in five businesses are considering changing their minds. Unizo now offers its members a bill-collection service where payment is on a sliding scale depending on when and how much the client pays.
According to the study, the main problem is the balance of power between a small business facing late payments from a larger company or being forced to accept longer-than-normal payment terms for fear of losing a major client.
“Bad payers undermine small businesses and the whole economy,” a Unizo spokesman said, pointing out that companies that don’t receive payments enter into cash-flow problems, which make it more likely they will themselves default on bills. It’s “a vicious circle in which businesses push each other into difficulties at the cost of a healthy economy,” the spokesperson said.
Unizo called on all levels of government to respect a previously proposed payment pledge by which federal, regional, provincial and local governments would respect a 30-day deadline on payments to small businesses. In particular, the new federal government should bring into force a law agreed by a committee of the last parliament that would allow companies to obtain a payment order from a judge on simple request.
“Governments can set an example by respecting payment terms of a maximum of 30 days for their small business suppliers,” Unizo said.
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