Businesses are being asked to share their views on measures designed to strengthen the Prompt Payment Code, including the possible establishment of an enforcement board that would have the power to remove signatories.
Other potential moves include the introduction of a maximum payment term for those who sign up.
The Prompt Payment Code, administered by The Institute of Credit Management (ICM) on behalf of the Department for Business, Innovation and Skills (BIS), seeks to spread good practice, with signatories committing to paying suppliers within strictly defined terms and having a clear process for dealing with any issues that may arise.
As The Journal’s Pay Fair campaign continues to gather momentum, a new joint ICM-BIS survey has been created to test initial proposals for strengthen the enforcement mechanisms of the initiative.
ICM chief executive, Philip King, said: “The ICM is committed to working closely with BIS to further strengthen and refine the Prompt Payment Code.
“Clearly this is something that we want businesses to willingly and honestly engage with, and not simply become a ‘tick box’ exercise, but it is important that we explore proposals for new initiatives such as an enforcement board to ensure the integrity of the Code is maintained.”
Business Minister Matthew Hancock said: “Late payment is entirely unacceptable and I am determined to make sure that small businesses are treated with the respect they deserve.
“The Prompt Payment Code should crack down on poor practice and we want to hear how businesses think the code can be strengthened.”
The overall level of late payment owed to small and medium sized businesses is approximately £40bn, according to BACS figures.
Through the Pay Fair campaign, The Journal is encouraging North East companies of all sizes to take a responsible and ethical approach to paying firms within their supply chain.
We are asking firms to sign the Business Ethics Pledge created by the North East Institute of Business Ethics, thereby agreeing to join with others to discuss the value of business ethics and to work with each other to transform their working environments for the better.
For more information, see http://www.nibe.org.uk/ .
Alongside the survey on strengthening the Code, BIS has separately published a new consultation on the proposal to nullify the ban on invoice assignment.
The Government believes the use of invoices as collateral for loans should be a viable funding method, but that too often bans on assignment create extra costs for businesses.
In some cases, it says, these can block finance and even lead to insolvency.