The Code, which is sponsored, hosted and administered by the Institute of Credit Management on behalf of the Department for Business, Innovation and Skills (BIS), encourages and promotes best payment practice between organisations and suppliers.
Sainsbury’s have recently been criticised by MP’s and the Forum of Private Business with regards to their lengthy payment times. However, a spokesperson for Sainsbury’s recently said, “We have indeed written to (Business Minister) Michael Fallon to confirm we are signing up to the Prompt Payment Code as we have received assurances that it will not cause unnecessary complexity to our business.”
The announcement comes after Mr Fallon issued another warning to all FTSE 350 companies to sign up to the Prompt Payment Code or face being publicly named and shamed later this month. The Business Minister’s efforts come after Bacs, the governing body behind Direct Debits, revealed that monies owed to small and medium sized UK businesses is more than GBP36.5bn, which is a record high.
A SmartDebit spokesperson from the firm commented: “The news of Sainsbury’s signing up to the Prompt Payment Code is very positive and hopefully sets an example to the rest of the FTSE 350 companies yet to sign up. A healthy cash flow is critical for small and medium-sized business to stay afloat during such challenging economic times, yet we continue to see UK’s largest businesses taking advantage their smaller counterparts. We urge all businesses struggling to settle invoices to take more control by introducing automated payments where possible.”
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