Receipt of prompt payment is critical to most SME's in the running of businesses. In order to help, the Prompt Payment Code has therefore been introduced by the Department for Business Innovation and Skills, as administered by the Institute of Credit Management (ICM).
The Code is about encouraging and promoting best practice between organisations and their suppliers. Signatories commit to paying their suppliers within clearly defined terms and applying a proper process for any issues which may arise. Code Signatories undertake to:
1. Pay suppliers on time
- Within the terms agreed
- Without attempting to change payment terms retrospectively
- Without changing practice on length of payment on unreasonable grounds
2. Give clear guidance to suppliers
- Providing suppliers with clear and easily accessible guidance on payment procedures
- Ensure that there is a system for dealing with complaints and disputes that is communicated to the supplier
- Advising promptly if there is any reason why an invoice will not be paid
3. Encourage Good Practice
- Suppliers encourage adoption of the code throughout their own supply chains.
The Code may only benefit you if those that are you are supplying are signatories. You can view the list of signatories and apply to become a signatory yourself, via the ICM website at http://www.promptpaymentcode.org.uk/