Partner Article

Yorkshire firms urged to tackle late payment scandal

Yorkshire firms hit by late paying customers have been urged to give their views on how to strengthen the Prompt Payment Code.

The call comes from the Institute of Credit Management (ICM) and the Department for Business, Innovation and Skills (BIS) following the launch of a survey seeking feedback on how to improve enforcement of the code.

The Prompt Payment Code aims to spread good practice across both the public and private sectors. Signatories commit to paying their suppliers within agreed and clearly defined terms and to ensuring that there is a proper process for dealing with any issues that may arise.

A new joint ICM-BIS survey will test initial proposals to strengthen the enforcement mechanisms of the Code.

This includes setting up an Enforcement Board, which could have powers to remove a signatory from the Code.

Views are also being sought on whether a maximum payment term should be introduced for Code signatories.

CIM chief executive Philip King said: “The ICM is committed to working closely with BIS to further strengthen and refine the Prompt Payment Code.

“Clearly, this is something that we want businesses to willingly and honestly engage with, and not simply become a ‘tick box’ exercise. But it is important that we explore proposals for new initiatives such as an Enforcement Board to ensure the integrity of the Code is maintained.”

Business Minister Matthew Hancock said: “Late payment is entirely unacceptable and I am determined to make sure that small businesses are treated with the respect they deserve.

“The Prompt Payment Code should crack down on poor practice and we want to hear how businesses think the code can be strengthened.”

The overall level of late payment owed to small and medium sized businesses is about £40bn, according to BACS figures.

This was posted in Bdaily's Members' News section by Robert Beaumont .