Larger businesses will soon be forced to publish their payment practice information to a central digital location, to be made publicly available by the Government.
Business Minister, Matthew Hancock has announced that from April 2016, large companies must publish their payment practices twice a year, in order to protect small companies from being caught out by late payment.
A new payment portal will enable the Government to collect data from large companies on dispute resolution processes, e-invoicing, supply chain finance and preferred supplier lists.
“We are determined to make Britain a place where late payment is unacceptable and 30-day terms are the norm – with a clear 60-day maximum,” said Hancock.
“We’ve acted to ensure all public payments do that, right down the supply chain, and are bringing in new strict transparency rules.
“These new rules will make poor payment performance a boardroom reputational issue for companies and help change the culture once and for all.”
The new legislation will mean large firms must disclose the following:
Average time taken to pay
Proportion of invoices paid beyond agreed terms
Proportion of invoices paid
In 30 days or less
Between 31 to 60 days
Beyond 60 days
Any late payment interest owed and paid
Larger businesses will also be required to publicly declare any financial incentives that exist to join or remain on supplier lists.
In the 2015 Budget, Chancellor George Osborne confirmed the government-backed Prompt Payment Code would be extended to consider poor payment practices, with the intention of widening its scope in the next Parliament.
The Department for Business, Innovation & Skills (BIS) published its consultation paper, ‘Duty to Report on Payment Practices and Policies’ last November, with a consultation process ensuing in recent months.