Prompt Payment to be duplicated by fair payment?
Announcement of the Governments plan for a fair payment code, to accelerate payments to sub-contractors on public construction projects, has received a cautious reception from the Institute of Credit Management and Bacs Payment Schemes Limited.
Launched in 2008, the Prompt Payment Code is hosted and administered by the ICM, on behalf of the Government’s Department for Business Innovation and Skills (BIS). The Code is designed to encourage and promote best practice between organisations and their suppliers and a recently launched BIS guide to getting paid on time is part of the marketing programme designed to promote the Code.
Philip King, chief executive of the ICM, says: “While we welcome all initiatives designed to help address the issue of late payments, the Government’s latest plan appears to duplicate the efforts of the Prompt Payment Code, launched only two years ago.
“There are already 917 voluntarily signatories to the Prompt Payment Code, 27 of which are operating in the construction industry, and our work in partnership with Bacs is set to drive this membership further.”
Latest research from Bacs, the not-for-profit organisation behind Direct Debit and Bacs Direct Credit, shows that British SMEs are currently having to wait an average of 41 days longer than their original agreed payment terms, before invoices are paid.
Mike Hutchinson, head of marketing for Bacs, says: “Bacs has invested heavily in researching the issue of late payments in recent years. Our new partnership with the ICM and Prompt Payment Code will see more efforts being channelled into building awareness and directly impacting payment practices.”
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