Businesses have backed the Prompt Payment Code (PPC) to support SMEs who are dealing with overdue payments.
32 big suppliers to the government have voluntarily committed to pay 95% of invoices within 60 days and are working towards making 30 days the standard norm.
The PPC sets the standards for best practice for businesses and suppliers dealing with late payments and invoices, ensuring everyone is paid on time and offered clear guidance on procedures.
It is estimated that SMEs are collectively owed more than £26 billion in overdue payments.
Margot James, small business minister, said:
“Such unfair payment practices hamper a business’s ability to invest in growth, and have no place in an economy that works for everyone.
“It’s great to see all 32 of our strategic suppliers signed up and committed to fair payment terms.”
Philip King, chief executive of the Chartered Institute of Credit Managers, added:
“The PPC allows suppliers to raise a challenge if they feel they are not being treated fairly by a signatory, and such challenges are proving successful not only in delivering payment but also in further improving practices and processes.
“It’s vital businesses feel confident and have certainty they will be paid on time, as well as having a route to challenge if they need to.”
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