This Content Was Last Updated on April 4, 2020 by Jessica Garbett
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.
You can see a list of the signatories and how to apply to join
Article contributed by ACCA In Practice