Firms across South Yorkshire are being urged to check their contract terms and those of their customers if they want to take advantage of new EU laws against late payment of bills.
A new EU law drastically reducing the time customers can take to pay their suppliers came into force recently.
Businesses will now be expected to pay supplier invoices within 30 days, unless both agree a longer time limit of up to 60 days.
After that date, suppliers will be able to charge interest at eight per cent above the European Central Bank’s reference rate and claim costs for recovering the debt.
Amy Cusworth, from Rotherham-based lawyers Oxley & Coward, said: “This law sends a strong message to those who fail to meet debt obligations within an adequate time frame.
“But business needs to recognise the new provisions will not apply to contracts made before 16 March and your contract terms, or the terms imposed by the customer must not override the legislation if you want to make use of it.”
One of the things companies should check is that they haven’t set a rate in their own terms and conditions that is less than the eight per cent in the legislation.
“If you have, say, a lower rate of interest hidden away in your contracts, you will not be able to claim this new statutory rate so the message is you should now be checking your contractual small print carefully,” added Amy Cusworth.