Terms of payment
Legal Project
May 12, 2009
Suzanne Haskins
Jelena Radosavljevic
Mohamed Kabadou
Carine Turpin
Albin Pinard
Sandy Rozhaveh Soleymani
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Table of Contents
Payment practices in France 2
Payment practices per a few sectors in France 4
Transportation 4
Aeronautics industry 5
French public administration 5
I. French public administration terms of payment general overview 5
II. Example of a successful practice: the Languedoc-Roussillon 6
III. Consequences of the decree of April 28th, 2008 7
IV. Delayed payment economic impact on a public sector customer 8
International payment comparison 9
3 groups based on risk of payment 10
Consequences 11
The Law of Modernization of the Economy 12
General scope of terms of payment 12
I. Legal change 12
II. Prohibitions 13
III. Sanctions 14
Suppliers /retailers relationship 15
I. Legal framework 15
II. Possible economic repercussions 16
Cash flow difficulties 19
First conflicts 19
Problems for SMEs caused by LME 20
Conclusion 21
Appendix/Sources 22
Payment practices in France
The disappointing reality of France’s modern economy and the EU’s economy as well, is the fact that it is becoming progressively more difficult to be paid on time. Companies are taking longer to pay their invoices and consequently this is having a direct negative impact on the current economic situation. This link between late payments and the damage it does to the economy causes a “domino effect”. Essentially lengthy payment delays are weakening a company’s cash flow which can ultimately spell financial disaster if not remedied quickly.
Generally speaking, payment delays decreased in 2007 whereas in 2006 it was the opposite. Customer delay of payment decreased from 1 to 2 days depending on the size of the company. The time of payment of suppliers also accelerated. TPEs (0-19) paid their suppliers under 63 days and SMEs (20-249) paid within 67 days whereas mid-sized (250-500)