Large companies in the United Kingdom are pledging to pay their suppliers on time as late payments threaten to destroy many businesses’ livelihoods.
According to information released by the UK Business Minister, nearly 20 large companies have agreed to sign the “Prompt Payment Code,” a promise to pay suppliers within agreed payment terms.
Requirements of the Prompt Payment Code include paying suppliers based on the terms negotiated in the contract, not retroactively changing contract terms, not using the economic downturn as an excuse to delay payments, providing suppliers with information for filing complaints if payments are not made on time, and encouraging suppliers to adopt the code throughout their own supply chains.
The Prompt Payment Code is part of a larger initiative started by the British Prime Minister in October 2008, when he promised that all vendors that supply the central government would be paid within ten days. Today, nine out of ten invoices are paid within that period.
According to Business Minister Shriti Vadera, “Late payment can be the final straw for small business in the current climate. So the commitment by major companies heading up supply chains to pay on time is a win for all businesses.”
Some organizations that have signed the Prompt Payment Code include Motorola, SONY, British Airways, Blackberry, Barclays Bank, and ten others.
