Large companies ‘to publish payment practices from next year’
Large companies will have to publish their payment practices from next April, under plans laid down by the Coalition Government.
Companies will also have to publicly state whether they require financial incentives to continue working with suppliers.
It’s uncertain whether the plans will be scrapped by the incoming government, but none of the main parties have expressed any opposition.
Under the new rules put forward by the outgoing Coalition, large companies will be required to disclose:
- payment terms
- average time taken to pay
- proportion of invoices paid beyond agreed terms
- proportion of invoices paid
- in 30 days or less
- between 31 to 60 days
- beyond 60 days
- any late payment interest owed and paid.
The aim is to ease the burden on smaller firms, which suffer the most as a result of late payments, and to make poor payment performance a reputational issue. Large companies will also have to publically declare whether financial incentives are required to join or remain on supplier lists. This follows concerns that some large companies were putting undue pressure on smaller suppliers.
The measures will require the approval of parliament but it’s thought unlikely that the incoming government will make significant changes. We shall keep clients informed of developments.
Please contact us if you would like more information about debt collection or credit control.