The Prompt Payment Code (PPC)
The Prompt Payment Code (PPC) aims to improve the supply chain cash flow for UK firms by tackling the issue of late payment.
The Code is sponsored, hosted and administered by the Institute of Credit Management (ICM) on behalf of the Department of Business Innovation and Skills (BIS).
Code signatories undertake to:
pay suppliers on time
- within the terms agreed at the outset of the contract
- without attempting to change payment terms retrospectively
- without changing practice on length of payment for smaller companies on unreasonable grounds
give clear guidance to suppliers
- providing suppliers with clear and easily accessible guidance on payment procedures
- ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers
- advising them promptly if there is any reason why an invoice will not be paid to the agreed terms
encourage good practice
- by requesting that lead suppliers encourage adoption of the code throughout their own supply chains
The Prompt Payment Code has the backing of the UK Government, the British Chamber of Commerce (BCC), the Confederation of British Industry (CBI), the Forum of Private Business (FPB), The Federation of Small Business (FSB) and the institute of Directors (IoD).
"Late payment forces businesses to close, plain and simple. Ensuring small firms are paid on time and in full is key to their future growth and prosperity, and also to the UK’s economic prospects."
- Phil Orford, Chief Executive of the Forum of Private Business
"Prompt payment is critical to the cash flow of every business, and especially to smaller businesses within the supply chain. But it is not just the timeliness of payment, though fast payment is always welcome, but rather the certainty of getting paid that is really important, and enables businesses to plan both for their short and longer term futures."
- Michael Fallon MP, Minister of State for Business and Enterprise
"The majority (73%) of small firms have experienced late payment within the last 12 months. This is both commercially and ethically wrong. Small firms suffer cash-flow problems not because they make less profit, but because work is not paid for in the agreed time. Big businesses can absorb the occasional unpaid bill. But late payers pose a bigger problem for small firms - a quarter of members experiencing late payment, spend three or more hours a week chasing up payment."
- Federation of Small Businesses (The UK's leading business organisation)