September 14 2016
The Department for Business, Energy Innovation and Skills has announced changes to the Prompt Payment Code. The 1800 large UK companies that have signed up to the code are now expected to pay their suppliers in 30 days with 60 days as a maximum. If payment terms are stretched past 60 days the company has to demonstrate that it is due to exceptional circumstances.
The signatories have been informed in a letter, which also confirmed the appointment of a Small Business Commissioner to give advice and support to smaller companies on payment issues.
The letter also reminds businesses of their statutory duty for large businesses to report payment performance and that this comes into force on 6th April 2017.
Small Business Minister, Margot James said:
“Prompt payment can make all the difference to small businesses, boosting their cashflow and allowing them to invest in growth for the future. Although we have seen some progress, there are still too many business owners across the country who have not been paid on time by their customers.”
Samantha White, CEO of My Credit Controllers said:
“Survey after survey have found that small companies suffer higher levels of late payment than ever and recent reports that late payment is the main factor in a quarter of all insolvencies shows just how important this agenda should be. The government's continued focus on improving the payment performance of larger companies is to be welcomed.”
How we can Help: