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|Businesses should use Challenge process to resolve late payment|
|Tuesday, 28 February 2017|
Disgruntled businesses owed money by the Ministry of Defence should channel their complaints through the Prompt Payment Code if they want a speedy resolution.
Philip King, Chief Executive of the Chartered Institute of Credit Management (CICM), says he is disappointed that not a single business reported in the press at the weekend had sought redress through the Code’s challenge process, despite its success in resolving issues in the past.
He believes that greater promotion of the Code, of which the MoD is one of almost 2,000 signatories, is needed as an immediate fix to some of the current late payment issues: “The Prompt Payment Code is an established mechanism for dealing with late payment, but not enough people know about the challenge process to keep signatories in line,” he says.
This, he continues, comes down to a simple matter of awareness: “Challenges against Code signatories have been hugely successful in achieving fast settlement of invoices, creating dialogue between parties, improving contract terms, and providing constructive assistance welcomed by suppliers and signatories alike. But much more needs to be done to get that message across.”
The Prompt Payment Code is administered by the CICM on behalf of the Department for Business, Energy and Industrial Strategy (BEIS). Each signatory commits to best practice in the fair and equal treatment of suppliers, many of whom are smaller businesses. Most recent signatories include Virgin Media, Arqiva, and South West Highways.
Last year the Government announced a series of measures within the Small Business, Enterprise and Employment Act to further strengthen the Code, as well as the appointment of a new Small Business Commissioner:
“We hope that the commissioner makes the Code a priority in the Government’s ambition to make a lasting change in payment culture for businesses of all sizes,” he concludes.
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