New measures to support Prompt Payment Code (PPC) have been backed in a letter sent to PPC signatories from Small Business Minister, Margot James and chief executive of the Chartered Institute of Credit Management, Philip King.
The letter confirms that paying invoices within 30 days should become the standard and that payments within 60 days will be a requirement unless there are exceptional circumstances which will be considered on a case by case basis.
From 6 April 2017, it will be a statutory requirement for large businesses to report on their payment practices annually.
More than 1,800 businesses are signed up to PPC, committing to fair and equal treatment of payments between owners and suppliers.
Research from Zurich in January 2016 found that 53% of small businesses are owed an estimated £255 billion in late payments.
Quote from Nigel Holland:
“ I support the new measures for the prompt payment code (PPC), as too many SMEs are often in a vulnerable position, with many creditors or suppliers delaying payments.
This can have a huge negative impact upon SMEs, who do not have revenue to keep the business running steadily. The PPC would give parties a reasonable amount of 30 days to repay invoices, which will reduce adverse implications for small businesses.
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