The Forum of Private Business has warned that the Prompt Payment Code (PPC) is a “meaningless” exercise used for “PR purposes” by Britain’s largest companies. The small business group has called for changes to be made to the Government-backed Prompt Payment Code, after hearing of businesses with payment terms as long as 90 days are planning to become signatories.
The PPC states that companies commit to paying their suppliers within clearly defined terms, however, the FPB claim the “spirit of the PPC” is being undermined because of this. The group have called for standard payment terms of 30 days and called for those that operate a “painfully slow” payment procedure to be blocked from signing the code.
Chief executive of the FPB, Phil Orford added, “We feel big businesses are cynically using the Prompt Payment Code to boast of their ethical credentials to the wider public, when in fact they are anything but to their suppliers.”
Always interested in developments of the PPC and the issue of late payments, a spokesperson from the Surrey-based SmartDebit commented on the Forum’s claims: “We’ve been following developments with the Prompt Payment Code since Bacs announced that UK companies are currently owed a combined total of GBP36.5bn in late payments, affecting over 1m small and medium-sized businesses. Our business revolves around clients receiving their payments on time, every time, improving the health of their business’ cash flow.” He continues, “The calls from the FPB come with a legitimate argument; payment terms of 90 days can hardly be called ‘prompt’. However, setting fixed payment terms for all may result consequences for suppliers that currently receive their owed monies promptly, as businesses may look to pay up closer to the 30 day limit. A review of the code must take all parties into account and practise flexibility.”
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