Companies are Reluctant to Resort to the Law Antimora
Author: Hector
Only 5% of companies reported suffering unpaid legal status Relations between firms are always complicated, especially when it comes to payments. According to the report of Pere Brachfield, professor at the School of Business Administration, Spanish firms do not report to its clients by default, although default has risen almost 7%, as reflected in the default rate produced by the company Credit & Surety.
In 2004 he published the Measures to Combat Delinquency to defend the rights of the companies pay. Despite having legal backing, only 5% of Spanish companies claim to other companies for failure to pay and when they decide to use legal action to claim what is yours do, just because they are not interested in continuing with trade relations.
Is a categorical decision, or until the default hold it adversely affects the business benefits or end for good trade relations. One of the fundamental causes without recourse to the law is because companies know their rights as to systematic delay payments. SMEs tend to be small with few employees who do not know the law against delinquency. Precisely the smaller companies are the most suffer the delay of payments. According to the consultant Intrum Justitia, annually, delays in payments can add up to 1,000 million euros.
On the other hand sales departments are often reluctant to stop when doubtful trade so to stay in a particular market.
Finally, the main cause of complaint is not complicated customer-supplier relationship. The expected loss of customers if they claim causes companies are able to withstand even knowing that they cause harm.
Branchfield The report stresses that depending on the type of business, timing can be extended significantly. In the case of food, media providers support recovery periods near 100 days. More alarming is the case of companies involved in construction. Contractors, subcontractors and materials manufacturers can have recovery times exceeding 200 days.
The Economy Ministry will present next month a report with data on the implementation of the Law of arrears in the complaint detailing the major associations of manufacturers, distributors and retailers. The data is being collected from the Central Balance Sheet Bank of Spain, Mercantil.y registry of the largest distribution and manufacturing, which have been asked by the assessment of the impact it has had the law since its adoption in 2004.
The aim is to tighten the law because depending on the sector, product and position of the debtor’s time can be extended from 45 to 300 days. On the other hand, the inspection tasks are hindered by the location of the manufacturer and trade in different regions.
The main measures are to be established to reform the law of debtors are:
-30 Days of payment period, in general, in the absence of agreement between buyer and seller.
Automatic high-accrual interest on late payment past due.
The creditor is entitled to claim reasonable compensation to the debtor for the recovery costs incurred to get collect the unpaid invoice.
- Possibility of agreeing a retention of title clauses for the seller retains title until full payment of the invoice.
- The contractual freedom should not protect abusive payment practices by imposing conditions that deviate from what the law says as’ reasonable benchmark. ” In any case, these practices will be declared invalid by the courts.
- Payment terms are established based on the mandatory nature of the product, in the case of retail.
- The procurement of services or property management shall be referenced to a maximum payment period of 60 days.
With these new rules is to ensure that billing and payment periods to customers and suppliers are fully neutral to the business of all sectors, and does not condition the competitiveness of certain enterprises over others. The experts called for the creation of an observatory to monitor the problem and a Defense of Creditor service.