Business Minister Matthew Hancock has announced that from April 2016, large companies will be required to publish their payment practices twice a year, in order to ensure that small companies do not get caught out.
Large firms will have to publish the information to a central digital location such as an online portal, which will be made publicly available by the government. The new payment portal will enable data to be collected on dispute resolution processes, e-invoicing, supply chain finance and preferred supplier lists. Under the new rules, large companies will be required to disclose:
average time taken to pay
proportion of invoices paid beyond agreed terms
proportion of invoices paid
in 30 days or less
between 31 to 60 days
beyond 60 days
any late payment interest owed and paid
“We are determined to make Britain a place where late payment is unacceptable and 30-day terms are the norm – with a clear 60-day maximum,” said Business Minister Matthew Hancock. “We?ve acted to ensure all public payments do that, right down the supply chain, and are bringing in new strict transparency rules. These new rules will make poor payment performance a boardroom reputational issue for companies and help change the culture once and for all.” The new reporting requirements will also mean that large companies will have to publicly declare whether financial incentives are required to join or remain on supplier lists. Read more about Britain’s late payment culture:Government-backed Prompt Payment Code set to implement “fairer payment practices”Charlie Mullins: The impact late payments have on small firms can be devastating“Late payment culture set at board level,” says MP ahead of supply chain bullying debate Companies will also report on their membership of codes of practice such as the government-backed Prompt Payment Code, which was recently strengthened to promote 30-day terms as standard, with a 60-day maximum limit. In the Budget earlier this week, the government announced that the scope of the code will be extended to consider other poor payment practices. The government intends to lay secondary regulations early in the next Parliament, with the requirement coming into force in April 2016.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.