Close to 2000 Companies Sign UKs Prompt Payment Code

late-payment

The Prompt Payment Code (PPC) sets standards for payment practices and best practice and is administered by the Chartered Institute of Credit Management (CICM), the largest professional credit management organisation in Europe.

The basic standard promotes a 30-day payment terms as the norm and include a maximum 60-day payment term (defined as paying 95% of invoices within 60 days, unless there are exceptional circumstances).

Compliance with the principles of the Code is monitored and enforced by the Prompt Payment Code Compliance Board. The Code covers prompt payment, as well as wider payment procedures.

I was impressed with the number of signatories they had to this “voluntary” code. They now have 1717 companies, both very small and large companies. They have over 100 companies with revenues greater than €500 million.

The other impressive fact is you can challenge a company that is a signatory if you feel they are not living up to the code. The Board can sanction signatories; including if need be expelling them from the Code.  The CICM will create a dialog and facilitate (but not arbitrate).

Large companies interviewed operating in Europe are clearly under pressure on payment terms. Governments of Europe are pressing large companies to shorten payment terms. Regardless if voluntary or not, they make it quite visible if you are not.

Anyone want to share any update on the EU Late Payment Directive in their home market?

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