Prompt Payment Code set to be enhanced
Since 2008, thousands of large companies have been signed up to the prompt payment code, which was designed to reduce the cash flow stress small companies often found themselves under. The prompt payment code introduced a mechanism for large companies to be bound to pay smaller suppliers within 60 days. However, the Government has expressed concern that delayed payments are still “rife” and it has therefore proposed reforms to the code.
These changes, to be introduced from July 2021, include;
- Reducing the payment deadline from 60 to 30 days;
- The CEO, finance director or a director will be encouraged to make a personal commitment to the code.
It is hoped these changes will ensure small businesses that have a viable future can emerge from the pandemic intact, given that the Federation of Small Business estimates that 50,000 small companies go bust every year because of late payment.
If you are a small business struggling with late payment of invoices, please contact us at firstname.lastname@example.org to discuss how we can assist you with recovery.