More businesses urged to sign up to prompt payment code
Big businesses are being called on to add their names to the Prompt Payment Code.
The Forum of Private Business (FPB) has argued that late payment and amended terms and conditions are creating severe difficulties for many smaller suppliers and wants more action to persuade large firms to sign up to the government’s Prompt Payment Code.
Phil Orford, the FPB’s chief executive, said: “During the current economic climate, the damage being caused by late payment and enforced changes to terms and conditions is huge and many small businesses are facing closure as a result.”
Mr Orford added that the aim is not to penalise bigger businesses with unfair payment demands but to bring consistency to the way that invoices are settled throughout the supply chain.
He continued: “This is not about the FTSE 100 companies having to pay early; it is about giving certainty and therefore creating stability throughout the supply chain by committing to a Prompt Payment Code. This commitment would help to develop much-needed confidence.”
The Late Payment of Commercial Debts Act gave small businesses a legal right to charge interest on late payments. But the FPB said that fears of losing custom mean that few small firms take advantage of the law.