Large and listed firms may soon have to publish details about their payment practices under proposals being drawn up by the government.
Companies will have to provide information about their average payment time and the proportion of invoices paid beyond terms. They will also have to reveal the percentage of invoices paid within 30 days, over 30 days, over 60 days and over 120 days.
The reports will have to be published quarterly and will be mandatory for all large and quoted companies.
The proposals have been drawn up in response to previous public consultations in which smaller firms requested greater transparency in how quickly large companies paid invoices. Ministers intend to introduce the measures as part of the Small Business, Enterprise and Employment Bill, which is currently going through Parliament.
It’s hoped that the enforced transparency and potential bad publicity will encourage companies to pay more promptly.
The government is running a consultation seeking views on the proposals, which would require that companies:
report on a quarterly basis
report on standardised metrics on payment performance
disclose additional narrative information on payment practices
publish the information on their website
face fines for breach of the requirement.
Business Minister Matthew Hancock said: “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 measures we are consulting on will make it clear to small businesses and consumers alike which large businesses behave properly, and those that think they can ride roughshod over their suppliers.”
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