The Government has recently completed a consultation into the problem of late payment, and is expected to publish a response in March this year.
Lobby group the Forum of Private Business has even called for the Government to allow small businesses to take anonymous legal action against larger companies if they fail to pay on time.
Suzanne Dean, Debt Recovery manager at Napthens solicitors, said there are a number of steps small businesses can take to help maintain cashflow.
She said: “Despite the adoption and application of the EU late payment directive on combating late payment in commercial transactions, late payment is still a common practice.
“There is no doubt that late payments are a real problem for many smaller businesses. This is not always because a larger company is wilfully delaying payment – sometimes there is so much internal bureaucracy that it simply takes longer than expected for a business to pay up.
“However, there is plenty that a business can do to keep cash flow running smoothly. For instance, tightening up credit control procedures.
“Make sure all terms and conditions are up-to-date and properly enforced, and that all staff adhere to a strict set of rules and know how to deal with unpaid invoices.
“Finally, consider legal action when it is necessary. No business wants to lose a regular customer and a guaranteed income, but sometimes there is no option but to pursue payment through the courts.”