New measures tackle late payments to small businesses
New measures are being introduced to tackle late payments that affect small businesses. The measures were supported in a letter from Minister for Small Business Margot James to PPC signatories.
The letter, which has been backed by Chartered Institute of Credit Management Executive Philip King, stated that paying invoices within 30 days should become “the norm.”
Under the new measures, making payments within 60 days will be a requirement, unless a company’s circumstances are exceptional.
According to the letter, help and advice on areas such as making faster payments and Statutory Duty to Report will be provided by a small business commissioner.
From 6 April 2017, large businesses will be required to report on their payment practices under the Duty to Report.
Earlier this year, research from Zurich showed that over 50 per cent of small businesses in the UK are owed £255 billion in late payments.
According to Margot James “prompt payment can make all the difference to small businesses, boosting their cashflow and allowing them to invest in growth for the future.”
She stated that although some progress has been made, there are still too many business owners across the country who have not been paid by their customers on time.
“We need a culture change to stamp this out and the Prompt Payment Code continues to play an important role in bringing this about, alongside a package of measures taken forward by government and industry,” she added.