Regaining financial stability in Europe is a multi-faceted project that requires new regulations across the board. In an effort to put the EU back on track for economic growth, the European Commission has amended its late payment legislation, reports Yahoo News.
Everyday, small and medium-sized businesses across Europe are forced to close down due to late payments. Invoices are neglected and the businesses are faced with bankruptcy. Suffering from a domino-like effect, business opportunities fall short and unemployment rises. The late payments culture has become pervasive across Europe, serving as a severe hindrance to the goods and services market. All of these sectors are directly affecting one another, and thus the EU has reorganized economic regulations to break the vulnerable cycle.
We’d love to be your preferred source for news.
Please add us to your preferred sources list so our news, data and interviews show up in your feed. Thanks!
The European Commission has published the amendments for late payment legislations that will come into action starting March 16, 2013. These amendments will presumably allow for a more simple and efficient payment process across the EU, and reduce the late payment culture. According to the new Directive, commercial businesses must settle their supplier invoices within a 30-day period. There is an exception for business-to-business payments, allowing for a 60-day period, however this is only acceptable if both agree to this duration. The goods or services business must negotiate and confirm to the contract of the supplier within 30-days. If services exceed a 60-day period, alternative measures can be made optional for enterprises, however will not be mandatory.
The Directive illustrated that if a late payment occurs; the supplier will be entitled to collecting interest and may also ask for a €40 compensation for recovery costs. Many of these new regulations have been created in accordance with the current UK legislation laws. The UK has previously worked on improving processing payments and fighting the late payments culture.
A spokesperson from UK SmartDebit commented on the Directive and stated, “This seemingly common sense initiative will provide encouragement fro small businesses across the continent, however, it remains to be seen what the working practices are and how it is interpreted within local law. Being that the new measures are optional for enterprises, smaller suppliers still may not challenge their larger buyers through fear of losing their business altogether,” reports Yahoo News.
Add as Preferred Source
