What's the best way to deal with late payments? Almost 50,000 small firms go out of business each year in the UK, due to late payments. So what action can you take if slow payers are starving your firm of cash? The IoD’s Information and Advisory Service (IAS) offers the following guidance. ✽ Find out why the customer isn't paying. Is it a dispute over the good/services provided? If so, resolve it quickly. Is it a cash flow problem with the customer? If so, agree an instalment plan and get it in writing. If the customer has no good reason, you have three options: engage debt collectors; issue a statutory demand (a written warning that you may litigate if the debt is not settled or no acceptable alternative solution is reached); or, for debts under £10,000, go to court using the small-claims track. ✽ Can I charge interest? By law, you can charge the statutory interest rate on a late payment: eight per cent a year plus the Bank of England’s base rate for business-to-business transactions....