Lewis’ advice accompanied the release of new research from the BPPG, which suggests that 91 per cent of UK firms believe large companies should be made to report their payment times.

Although every UK PLC is legally obliged to report how long they take to pay their bills, only 3,243 released the figure last year. This represents a 21 per cent reduction on 2001-02 and seems all the paltrier when you consider that there are around 7,000 businesses with more than 250 employees in the UK.

With the BPPG estimating late payment causes up to 10,000 small business failures each year, the need to solve this problem is urgent, yet Lewis is concerned that the obligation on PLCs “gets lost” in amongst the other laws governing them.

His advice is simple. “Make sure you set the terms [of payment] from the outset – often both firms will send each other their terms and conditions as just assume that theirs’ are the ones being accepted”.

Under recent legislation business can also charge interest and claim compensation on late payment. The rules entitle businesses to charge interest at an 8 per cent premium to Bank of England base rates on debts due from other firms and public sector groups. They can also seek compensation of £40, £70 and £100 respectively, on outstanding debts of up to £1,000, £1,000-£10,000 and £10,000 or more.

For further tips and advice on credit management visit the BPPG’s www.payontime.co.uk website