These comments came as Mark Prisk hosted a workshop with a range of industry bodies to agree on a revised action plan. This will centre around three elements; Government leading by example; extending the Prompt Payment Code; and actively promoting best practice with the Small and Medium sized Enterprise (SME) representative bodies.
Prisk said: “By looking at which business sectors have good practice and those that don’t we can start to identify where practical improvements can be made and understand the behaviours that lead to a culture of late payment. It’s vital that all business sectors understand the importance that prompt payment has in the cashflow management of a business.
“I am determined to help businesses change the culture of late payment by encouraging them to make sure they are paying invoices correctly and on time.
“Legislation alone cannot do enough to enforce prompt payment of suppliers. We need practical, business-focussed solutions to help SMEs in particular and make sure they are paid promptly.
“One of the most important steps is for businesses to formally agree terms of payments before transactions and stick to these terms. Simple practical measures can help SMEs make great strides in securing the cashflow that will help them thrive and grow.”
The workshop will include participants from the Forum of Private Business (FPB), Institute of Credit Management (ICM) and the Association of Certified Chartered Accountants (ACCA).
Late payment creates cashflow problems for SMEs. Advice and guidance for SMEs to help them make sure they are paid on time is part of the Finance Fitness campaign, which sees Government and businesses working together to help SMEs with common financial problems.
Over 1000 big businesses have already signed up the Government’s Prompt Payment Code which is managed by the ICM. Small firms can get more advice and information on securing prompt payment at BusinessLink.gov.uk and from the Cash Management guides developed by the ICM, in association with the department for Business, Innovation and Skills (BIS). Latest figures show that the number of downloads made has now gone past the 300,000 mark.