As a result of Government consultation, larger firms will now be required to publish information about their payment practices. The government will also act to get rid of legal barrier which prevent firms from accessing invoice finance.
These measures com as in the consultation a clear majority of businesses called for greater disclosure to tackle late payment. The government will also work with the Institute of Credit Management (ICM) to further strengthen the Prompt Payment Code and to increase accountability of signatories.
Legislation may be required to implement these measures and it has been stated that this will be introduced in due course based on the time available to parliament. Business Secretary Vince Cable said:
“For too long too many large companies have been getting away with not paying their suppliers on time to maximise their profits. It is small business that is suffering as a result and it needs to stop.The government has taken action to create a responsible payment culture but we need to go further. We will now make it compulsory for large companies to publish information about their payment practices so that those who are not playing fair can be held to account.”
The Minister for Skills and Enterprise Mathew Hancock noted how his small business background has helped him understand that prompt payment is important. He said;
“I come from a small business background so I know how important it is to receive payment when it’s promised. The steps we’re taking today in response to the business community’s concerns will help to reduce the strain of late payment.”
Hancock also stressed that it is good practice for businesses regardless of size to adhere to the Prompt Payment Code. The input from the Institute of Credit Management is said to be important in strengthening the code and promoting prompt payment culture.
The plan recognises the importance of small business in the country’s economic growth and prosperity and seeks to ensure the security of small businesses.
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