The government’s major suppliers have signed up to the Prompt Payment Code, which helps small businesses to be paid on time, with 32 committing to pay 95% of invoices with 60 days
The government’s biggest suppliers have also voluntarily committed to work towards adopting 30 days as the norm.
The Prompt Payment Code helps the cashflow of small businesses as it is estimated that small and medium sized enterprises in the UK are collectively owed more than £26bn in overdue payments.
The signatories to the code are major strategic suppliers who typically have contracts across government of more than £100 million. Together they account for around 40% of government procurement spend.
The Crown Commercial Service (CCS) encourages businesses to sign up to the Code, which is administered by the Chartered Institute for Credit Management (CICM) on behalf of BEIS (the Department for Business, Energy & Industrial Strategy).
The voluntary code of practice publicly signifies organisations’ commitment to fair payment terms to suppliers, especially smaller businesses.
Parliamentary Under Secretary of State in the Cabinet Office Caroline Nokes said: ‘This is a major boost to payment practices in the UK. Paying invoices on time is vital in providing healthy cash flow to smaller businesses, to help them survive and thrive.’
Small Business Minister Margot James said: ‘We want the UK to be the best place in the world to start and grow a business, but the UK’s small-to-medium-sized businesses are currently owed over £26 billion in overdue payments. 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 is only right that the government should lead by example, and it’s great to see all 32 of our strategic suppliers signed up and committed to fair payment terms.’
