Businesses are routinely delaying payments to trading partners by forcing them to reissue invoice statements, according to a new survey out today by Creditsafe.
The credit intelligence firm said that one in 10 companies are increasingly using accounting tricks and bizarre excuses to force suppliers to bill them again in an effort to hold on to money for longer.
The survey of 1,000 businesses showed that 96 per cent of firms surveyed have been forced to reissue invoices to their customers in the last 12 months.
More than one in 10 suppliers has been forced to reissue at least 20 per cent of client invoices in the last 12 months. And during the same period, one in five companies has had to reissue between 10 and 20 per cent of invoices.
Creditsafe said that just under three quarters of firms (71 per cent) used the excuse that the invoice was never received to delay payment – despite many suppliers using recorded post.
David Knowles, Creditsafe business development director, said: “Ensuring the reissue of invoices is, unfortunately, often an effective tactic to delay payments, but it is extremely poor business practice and ultimately flouts a moral obligation to pay on time for goods or services that have been purchased and probably used.”
Knowles added that the late payment of invoices prevents the efficient flow of cash through the supply chain, which is vital if businesses are to maintain their liquidity during a time when bank lending is restricted.
Half of the businesses surveyed that accept cheques for payment said customers were making deliberate mistakes, such as failing to sign the cheque or writing the incorrect amount or date, to stall payments.
Creditsafe said that some outlandish responses from firms were reminiscent of the “dog ate my homework” schoolboy excuses, for example one firm said “Our accounts lady is off at the moment as her cat died” in a bid to delay payments.
Knowles said: “Firms can take proactive steps to identify those businesses that represent a poor credit risk or are habitual late payers by using business intelligence services and credit reference agencies.”