ONE of the great joys of running a business is landing a big order but often the joy turns to gall when your hard-won customer fails to pay on time.

Five years ago, with a loud fanfare, the government passed legislation to curb late payment.

We at the Dorset chamber welcomed it enthusiastically because we knew how this practice was blighting small businesses.

We can now see this legislation for what it was - almost completely useless.

A recent survey by Experian confirmed what many had quietly suspected. Not only has the Late Payment of Commercial Debts (Interest) Act failed to reduce the time firms take to pay but the problem has actually worsened.

The average payment period for large companies has increased from 72.1 days in 1998 to 78.5 days in November 2003 - a disgraceful increase of 6.4 days.

Medium-sized businesses showed a marginal improvement of half a day and small businesses a marginal deterioration.

But the headline news is that large companies are abusing their power. They know that if their smaller suppliers wish to retain their business they will not use their rights under the Act to demand interest for late payment.

This is a British disease. We are far worse than our European neighbours. It is damaging to businesses, especially small firms, which can be forced into liquidation by the failure of big customers to pay on time.

Firms can take steps to minimise the risk of bad debt, and it has to be said that the Act is not entirely bad news.

There are industries where large firms have improved their payment times. And even outside these industries, local authorities, other organisations and businesses that take their corporate responsibilities seriously have set an admirable example.

The government needs to try again to get a grip on this. Economists constantly remind us that healthy small businesses are the lifeblood of any economy.

And as any SME proprietor will testify, cash flow is the lifeblood of small businesses - but we also need to remember that businesses should not simply rely on the government to sort out their problems.

The government will give us tools to deal with issues like this but if we choose not to use them we can hardly then blame the government.