Creating a responsible payment culture
New measures have recently been announced by the Department for Business, Energy and Industrial Strategy (BEIS) to clamp down on poor payment practices, which affect thousands of businesses throughout the UK. These measures include:
- new powers for the Small Business Commissioner to tackle late payments through fines and binding payment plans;
- company boards to be held accountable for supply chain payment practices for the first time – forcing Audit Committees to report payment practices in a company’s annual report;
- a new fund to encourage businesses to use technology to simplify invoicing, payment and credit management; and
- responsibility of the voluntary code of best practice, the ‘Prompt Payment Code’, will be transferred from the Chartered Institute of Credit Management to the Small Business Commissioner.
Since the Small Business Commissioner’s Office was set up to tackle the issue of late payments in 2017 it has already recovered over £3.8 million. The changes seek to further address this issue and create a level playing field for the UK’s 5.7 million small businesses. Promoting a responsible payment culture will pave the way to boost SME productivity, remove barriers to growth and improve cash flow.
If you are a large business and would like to find out more about how these changes may affect you, or are an SME who is owed money, please get in touch.Back to Our Thinking →