Government action on late payment has been welcomed by leading accountancy body ACCA.
The announcement by Jonathan Reynolds, Secretary of State for Business and Trade, of a new Fair Payment Code to replace the Prompt Payment Code is the first step in the right direction.
Glenn Collins, head of technical and strategic engagement at ACCA, said: “We are pleased to see this move by the government today. ACCA has been a consistent and vocal supporter of the need to ensure small businesses are paid on time and have clear knowledge of the payment practices of who they are doing business with. It is a great first step but there will be more work to do. We look forward to participating in the consultation on the proposed new laws.
“Late payment and unfair practices continues to blight small businesses across the UK. We have long called for urgent implementation of proposed improvements to tackle late payment problems, including expansion of prompt payment reporting and the proposed expansion of powers for the Small Business Commissioner (SBC). We are glad that some initiatives are now being taken.”
Lloyd Powell, head of ACCA Cymru/Wales, added: “Small businesses account for more than 99% of businesses in Wales. It is vital that they are able to get paid on time, as cashflow drying up can be a serious problem for them, more so than larger businesses.
“We are pleased that the SBC has been given extra powers to tackle some of the defaulters under the old code, however we will be calling for additional reforms to provide more transparency in this area.
“Clearly this is voluntary, but we urge Welsh businesses across the supply chain to see how they can sign up to this enhanced code and work together to eradicate the scourge of late payment.”
Based on the insight from members over the last two decades, ACCA is clear that late payment is a persistent problem in the UK. Poor payment practices have a domino effect throughout supply chains, with severe consequences for cashflow and the survival of SMEs. To rectify this situation, strong action – including a decisive culture shift – is required.
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