New reporting proposals to tackle late payment
The Government has launched a new consultation on proposals that will oblige large and listed companies to publish detailed information about their payment practices and performance.
The proposed changes will provide for a new robust reporting regime, making it easier for small businesses to access data when considering which large companies to work with.
Specifically, this will include:
- the average payment time;
- the proportion of invoices paid beyond terms;
- and the proportion of invoices paid within 30 days, over 30 days, over 60 days and over 120 days.
The consultation also asks for views on the proposals that will see companies:
- reporting on a quarterly basis;
- reporting on standardised metrics on payment performance;
- disclosing additional narrative information on payment practices;
- publishing the information on their website;
- facing fines for breach of the requirement.
The consultation follows the announcement last month that a new Prompt Payment Advisory Board has been set up to strengthen the impact of the Prompt Payment Code.
Business Minister Matthew Hancock said:
‘Tackling late payment is at the heart of our drive to help small businesses. Coming from a small business background, I know just how critical late payment can be for small firms’ cashflow. We know that small businesses are often reluctant to risk losing business by using the redress measures we’ve put in place, so we want to tackle the underlying culture by increasing transparency on payment practices and performance. The measures we are consulting on will make it clear to small businesses and consumers alike which large businesses behave properly, and those that think they can ride roughshod over their suppliers.’
The consultation will close on 13 January 2015.