Operators should soon be able to see how promptly large firms pay their bills under government proposals announced last week designed to name and shame businesses that “ride roughshod over their suppliers”.
Increased transparency will, according to the government, enable smaller businesses to compare larger firms’ average payment times and the proportion of invoices paid late. It will also allow firms to evaluate the length of time a company opts to pay its bills, such as within 30 days, more than 60 days, or more than 120 days.
The government proposes that firms should report quarterly, to standardised metrics, to enable benchmarking of performance. Directors will be responsible for providing data, with potential fines for failure to do so.
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 will make it clear which large businesses behave properly, and those that think they can ride roughshod over their suppliers.”
As of July this year, the amount of late payments owed to small- and medium-sized firms stood at £39.4bn, with the average amount owed to small firms at £38,200.
