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Late payers could be named and shamed

Big businesses that fail to to sign up to the Prompt Payment Code could be publicly named, Business Minister Michael Fallon has warned.

The Department for Business, Innovation and Skills said the Minister has written to all FTSE 100 and FTSE 250 companies, urging them to sign up to the code and warning that those who fail to do so will be publicised in the new year.

Mr Fallon said: “Late payment causes real cash flow problems for entrepreneurs. It stops them from growing their business – we need to change the culture.

“Too many of our biggest companies are ignoring the Prompt Payment Code. My message to them is clear - make prompt payment a priority or face the consequences of being named. I’m confident that driving up support for the common sense principles in the Code will have a very positive effect.”

1,182 companies are currently signed up to the Code, however only 27 FTSE 100 companies and five FTSE 250 companies are signatories.

Phil Orford, chief executive of the Forum of Private Business said a “domino effect” can occur across the supply chain when payments were late, and hoped the initiative would be part of a process to reverse this trend.

In addition to the Code, the Government is also advising businesses to make use of Supply Chain Finance schemes, which allow banks to offer loans to businesses when an invoice has been approved from the supplier; raise complaints through legal channels over late payment from Code signatories; and use electronic invoicing where possible.

This was posted in Bdaily's Members' News section by Tom Keighley .