Thursday 26th March, 2015

Signatories of the Prompt Payment Code (PPC) have been informed of the launch of a series of changes to payment commitments that they will now be obliged to follow.

The Prompt Payment Code will now promote 30-day payment terms as the norm and include a maximum 60-day payment term (defined as paying 95% of invoices within 60 days, unless there are exceptional circumstances).

Signatories will be asked to undertake to avoid any practices that are grossly unfair and adversely affect their suppliers. They will also be required to report annually (for SMEs sized signatories) on payment performance and half-yearly (for large signatories) in line with the new statutory reporting requirement.

A new Compliance Board has also been appointed with a monitoring and enforcement role and to impose sanctions for non-compliance.

Mr King, Chief Executive of the Chartered Institute of Credit Management (CICM) says that the Code and the ‘challenge’ process have already been a success but that further support is welcome: “Signatories are being encouraged to comply with the strengthened code now, before the changes are enforced in 2016.”

Launched in 2008, the PPC currently has more than 1,800 signatories, is administered by the CICM for the Department for Business, Innovation and Skills (BIS)