Regulations, which will come into force from April 2017, will require large companies and limited liability partnerships (LLPs) to publicly report twice yearly on their payment practices and performance, including the average time taken to pay supplier invoices
The Chartered Institute of Credit Management (CICM) has welcomed draft regulations which will require large companies to publish details on their payment practices.
It has also applauded the Prompt Payment Code (PPC) being recognised as the ‘gold standard’ in the fair treatment of suppliers, saying that the Government has clearly listened and responded to the need to change payment culture.
Chief executive Philip King said: “The Small Business Minister (Margot James MP) is to be applauded for engaging with and listening to organisations like the CICM and the Federation of Small Businesses in driving real change.
“The new ‘Duty to Report’ will lead to much greater transparency and is clearly one of a suite of measures to improve payment practices, including the Prompt Payment Code, the appointment of a new Small Business Commissioner, and first and foremost, best-practice credit management.”
The ‘Duty to Report’, which will come into force from April 2017, will require large companies and limited liability partnerships (LLPs) to publicly report twice yearly on their payment practices and performance, including the average time taken to pay supplier invoices.
The Government will publish guidance on how to comply with the duty to report early next year, to help large businesses prepare for the new reporting requirements.
King says he is encouraged by the Government’s commitment to lead by example, especially in relation to the Prompt Payment Code.
He said: “I am pleased to see that the Government is itself taking measures to ensure all strategic suppliers are signed up to the Code and this is an opportunity for other large businesses to take similar positive action to show they genuinely value the supply chain.”
But King admits all of the proposals in the draft regulation will be universally welcomed.
He added: “The requirement for firms to report at an individual company level, rather than at a ‘group’ level, will cause difficulties for some organisations, but at least there has been the opportunity for discussion and consultation.”
The CICM administers the PPC on behalf of the Department for Business, Energy, and Industrial Strategy.