Small Business Minister Margot James and Philip King, Chief Executive of the Chartered Institute of Credit Management have confirmed new measures to support the Prompt Payment Code in a letter sent to the code’s signatories this week.
Over 1,800 firms have signed up to the Prompt Payment Code, agreeing to maximum payment terms of 60 days and a target payment time of within 30 days as part of their commitment to the fair and equal treatment of suppliers.
Under the code, companies whose payment terms stretch beyond 60 days must be able to demonstrate that exceptional circumstances apply and will be considered on a case-by-case basis.
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. We need a culture change to stamp this out and the Prompt Payment Code continues to play an important role in bringing this about, alongside a package of measures taken forward by government and industry. The businesses signed up to the code commit to demonstrating the gold standard of payment practices and it’s great to see so many of Britain’s leading household names on the list.”
John Thompson, Chief Executive at APHC, commented, “Within the plumbing and heating industry, late payment is a significant issue, severely restricting the cashflow that is essential in order for installers to run their businesses. In this sense, we believe that the Small Business Minister’s new measures to support the Prompt Payment Code are a step in the right direction. In the longer term we would however like to see the measures go further in support of the supplier, and the maximum payment period term be reduced to 30 days.”
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