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The proposed changes will provide robust information making it easier for small businesses to 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.
The new reporting requirement has been developed in response to feedback from an earlier consultation, where a clear majority supported increased transparency. 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. Reporting on a quarterly basis will be a mandatory requirement for all large and quoted companies.
Business Minister 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 consultation asks for views on the proposals that will see companies:
- reporting on a quarterly basis
- reporting on standardised metrics on payment performance
- disclosing additional narrative information on payment practices
- publishing the information on their website
- facing fines for breach of the requirement
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Susie Hughes © Shout99 2014
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