Under the new rules, which came into force on August 7, businesses get the right to charge up to £100 for time spent chasing each unpaid bill. This is an added boost following earlier changes in legislation in recent years to allow businesses to charge interest on late bills and is aimed at making late-payers think twice before coming up with excuses for not coughing up monies owed.

Other changes included in the late-payment package mean small firms will be able to ask an appropriate representative body to challenge contracts that do not provide them with a substantial remedy for late payment. This means that bodies such as the Fresh Produce Consortium or the National Farmers' Union could bring added pressure to bear on a late payer.

The interest rate for late payments will also be fixed for six months rather than fluctuating monthly. Businesses of all shapes and sizes stand to benefit from the late-payment measures unlike previous legislation, which was applied to small businesses only.

The department of trade and industry estimates that some 10,000 business failures a year are attributable to late payment and the issue is one that has dogged the fresh produce wholesale sector for years.

'Prompt payment can make the difference between success and failure for a small business,' said small business minister Nigel Griffiths. 'The new legislation will ensure that the cash keeps flowingSThe right to charge for the wasted efforts spent chasing unpaid bills should make slack payers think twice before trying to stall for time.'