Phased changes will help strengthen the Prompt Payment Code.
The Prompt Payment Code, which is regarded as the best practice for payment of suppliers, has been further strengthened, with signatories to the code being asked to:
pay invoices within a maximum of 60 days, and seek to pay within 30 days as the norm
avoid practices that are grossly unfair and adversely affect your suppliers
report annually (for small and medium sized signatories) on payment performance, on a comply or explain basis, and half-yearly (for large signatories) in line with the new statutory reporting requirement; and
provide five references (up from two) to validate membership.
The timeline for the changes is:
signatories asked to comply with 30 and 60 day payment terms
signatories asked to avoid practices that are grossly unfair and adversely affect suppliers
requirement for five references introduced for new signatories
new Code website goes live
new Code Compliance Board comes into being.
large company signatories within the scope of the new statutory reporting requirement asked to start half-yearly reporting on their payment performance
all signatories required to submit additional information and references
all other signatories, including small and medium sized companies outside the scope of the new reporting requirement, asked to start annual reporting on their payment performance on a comply or explain basis.
all signatories required to start reporting on their payment practices
maximum payment terms will come into force – signatories to seek to pay within 30 days, and required to pay 95% of invoices within 60 days, unless exceptional circumstances apply.