Prompt Payment Reforms Are Coming
Did you know that it is estimated that in the UK SME sized organisations are owed £23bn in late payments?
In these unprecedentedly difficult times the survival of small suppliers can depend on how quickly they get paid. That is why nearly 3,000 organisations have already signed up to the Prompt Payment Code.
In July this year the Prompt Payment Code will be strengthened so that 95% of payments to SMEs must be paid within 30 days and those companies will be permitted to charge interest on overdue payments. For this, SMEs are defined as organisations with less than 50 employees … for companies with more the 60 day payment limit will stay.
Not only that, the prompt payment “pass mark” for companies bidding to supply Government with work in excess of £5m per annum will increase on 1 April to 85% of all invoices to be paid within 60 days – up from 75%. Organisations that fail to meet these targets are in danger of being excluded from winning government contracts.
So, are you confident that you will be able to meet these targets? Are your systems and processes robust enough? Has your Accounts Payable Team been impacted by Covid-19? Do you have a backlog of invoices that you’ll need to clear before this change?
Liberata is here to help.
We have been supporting our customers’ Accounts Payable function for many years – processing backlogs and getting the organisation in the position where they can pay their suppliers in a timely fashion and get paid promptly by their customers.
Our Back on Track service allows you to get your finances into shape ahead of this change to the Prompt Payment Code.
Contact us to learn more about how we can help you get ready for the Prompt Payment Code changes.