A further 11 companies listed on the FTSE 100 have signed up to the Government’s Prompt Payment Code. Companies which pledge to abide by this Code must pay their contractors and suppliers on time in accordance with the terms of their contract and cannot attempt to change these payment terms after the fact.
Approved signatories of the Code are required to give comprehensible guidance to their contractors and suppliers, including guidance on payment procedures. If an invoice cannot be paid as per the contract, suppliers must be notified immediately. They should also have a complaints system in place to deal with any complaints or disputes which may arise.
Good practice is to be encouraged by lead suppliers adopting the code within their own chain of supply.
The Government states that the companies who have now signed up to the Prompt Payment Code are B&Q, AMEC, Centrica,plc, Motorola UK LTD, Barclays plc, British Airways plc , Sony UK, Standard Chartered and SKY. An agreement in principle has been obtained from Cisco, Alliance Boots, Cobham plc, RSA Insurance Group plc, WPP Group plc, Yahoo UK, British American Tobacco and HSBC.
Lord Mandelson will maintain pressure on remaining FTSE companies to abide by the Code. The Business Secretary commented, “Government has now taken the lead with nine out of ten central Government invoices now being paid within ten days – the challenge is now for businesses to step up and play fair. The promise by FTSE companies to pay on time is very welcome and will hopefully bring an end to the devastating impact which late payments can have on small businesses”.