Tuesday 2nd December, 2014

Business Minister Matthew Hancock has unveiled new proposals obliging large and listed companies to publish detailed information about their payment practices and performance.

The proposed changes will provide robust information to help small businesses compare the role models with the less reputable. Specifically, the average payment time, the proportion of invoices paid beyond terms and the proportion of invoices paid within 30 days, over 30 days, over 60 days and over 120 days.

Reporting on a quarterly basis will be a mandatory requirement for all large and quoted companies.

The new proposals show how the Government intends to use the prompt payment power in the Small Business, Enterprise and Employment Bill which is currently going through Parliament.

Matthew Hancock said: “Tackling late payment is at the heart of our drive to help small businesses. Coming from a small business background, I know just how critical late payment can be for small firms’ cashflow."

"We know that small businesses are often reluctant to risk losing business by using the redress measures we’ve put in place, so we want to tackle the underlying culture by increasing transparency on payment practices and performance”.

"The measures we are consulting on will make it clear to small businesses and consumers alike which large businesses behave properly and those that think they can ride roughshod over their suppliers."

Chief Executive of the Institute of Credit Management, Philip King, said: "Transparency is a key element in changing culture across many aspects of business, and payment behavior is no exception. I applaud the measures in the Small Business Bill to drive change by allowing more visibility of how businesses behave in paying their suppliers."