Margot James MP has voiced her support for the Prompt Payment Code.
The Prompt Payment Code is designed to ensure swift payments between organisations and their suppliers. Signatories to the Code undertake to pay suppliers on time and within terms agreed in a contract, give clear guidance to suppliers and ensure there is a system for disputed, and encourage good practice by requesting that lead suppliers adopt the Code themselves.
The Government has also committed to the Code, with Government departments now paying 80% of invoices within 5 days.
So far, the Department for Business, Innovation and Skills as secured 1,000 registered businesses as signatories, but wants this figure to rise. It has also worked with the Institute of Credit Management to promote a range of practical business tools online, which will also be useful for businesses.
Margot said, “Late payment is an awful problem for any business, but especially to small businesses. Recent research showed that SMEs are having to wait an average of 41 days longer than their original agreed terms before invoices are paid. This can cause immediate cash flow problems and make it impossible for businesses to plan for their longer term futures.
“The Prompt Payment Code is an excellent initiative and I would encourage local businesses to sign up and take advantage of the scheme. Swift payments create confidence in a business, which benefits both suppliers and customers.”