From the top Fred Heritage · 13 September 2016
Margot James reaffirms government commitments to combat late payments
Small business minister Margot James has reiterated her support for measures that will encourage better payment practices towards small firms, in a letter to signatories of the Prompt Payment Code (PPC). Writing to some 1, 800 UK businesses, James, along with the letter’s co-author chief executive of the Chartered Institute of Credit Management (CICM) Philip King reminded PPC signatories of their commitment to paying suppliers, most of which are small firms, within 30 days. Highlighting the success of the code to date, the letter acknowledged some of the challenges faced by its signatories, which it said had been hugely successful in achieving fast settlement of invoices, creating dialogue between parties, improving contract terms, and providing constructive assistance welcomed by suppliers. Administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy (BEIS), the PPC is one of a series of measures tackling late payments introduced by the government as part of its Small Business, Enterprise and Employment Act 2015. The letter urged the code’s signatories to increasingly make 30-day payment terms to UK suppliers the norm, and that although 30-day terms would not be actively enforced by the PCC’s compliance board, paying invoices within 60 days may become a requirement unless exceptional circumstances? were accepted on a case-by-case basis for example if a business owner could demonstrate that different payment terms would be beneficial to their smaller supplier. In the letter, James said: Prompt payment can make all the difference to small business owners, 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.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.