In an attempt to eradicate late payments to small businesses of approximately £41bn, the government has proposed that, from April 2016, large listed companies will have to report twice-yearly on:
- their standard payment terms;
- average time taken to pay;
- the proportion of invoices paid within 30 days, 31-60 days and beyond agreed terms;
- amount of late payment interest owed/paid;
- incentives charged to join/remain on preferred supplier lists;
- dispute resolution processes;
- the availability of e-invoicing, supply chain finance and preferred supplier lists; and
- membership of a Payment Code.
A copy of the simple but effective sample report is attached to the government's announcement.
Not only should this data result in the naming and shaming of late payers, but it should also further define and foster growth in the market for discounting these invoices, to help fund the growth of the affected SMEs.