UK firms urged to adopt ebanking

A report from the Bankers Automated Clearing System (Bacs) claims UK business is wasting as much as eight million working days a year by ignoring electronic methods of payment.

By paying suppliers by cheque, they waste not only time but also efficiency, as they do not know exactly when payments have left their account. Apart from avoiding 'cheque in the post' conversations, the service means payment goes straight into the account rather than taking three or four days to clear.

Jeremy Asprey, product manager for Direct Credit at Bacs, said: "The time to act is now because the late payment legislation coming in on the first of November means companies will be liable if they don't pay on time." Asprey blamed inertia for slow take-up of the scheme.

The new law means small businesses will have the right to claim interest on late payments. Asprey said business must look at all its processes to improve efficiency if it wanted to "soft land" the recession.