November 27 2014
The Department of Business Innovation and Skills (BIS) has announced proposals that it hopes will embarass larger companies into improving their payment performance, particularly when settling bills from small and medium sized enterprises (SMEs).
The idea is to force large and listed companies to report on their payment performance and payment practices. Specifically they will have to report their average payment time; the proportion of invoices paid beyond terms; and the proportion of invoices paid within 30 days, over 30 days, over 60 days and over 120 days.
Business Minister Matthew Hancock said:
"Tackling late payment is at the heart of our drive to help small businesses. Coming from a small business background, I know just how critical late payment can be for small firms’ cashflow. We know that small businesses are often reluctant to risk losing business by using the redress measures we’ve put in place, so we want to tackle the underlying culture by increasing transparency on payment practices and performance.
The measures we are consulting on will make it clear to small businesses and consumers alike which large businesses behave properly, and those that think they can ride roughshod over their suppliers."
Samantha White, CEO of My Credit Controllers, said:
"My Credit Controllers welcomes this government attempt to tackle the problem of late payment of invoices. Large companies aren't the only businesses that pay beyond terms, but should certainly be setting a good example to everyone else."
"If you've got debts that are overdue, why not try our business debt recovery service ?"
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