From April 2016, large companies will be required to publish their payment practices twice a year. Under the new rules, large companies will be required to disclose:
– Payment terms
– Average time taken to pay
– Proportion of invoices paid beyond agreed terms
– Proportion of invoices paid
in 30 days or less
between 31 to 60 days
beyond 60 days
– Any late payment interest owed and paid
Large firms will have to publish the information to a central digital location such as an online portal, which will be made publically available by the government. These new reporting requirements also mean large companies will have to publically declare whether financial incentives are required to join or remain on supplier lists.
The new payment portal will enable data to be collected on dispute resolution processes, e-invoicing, supply chain finance and preferred supplier lists. Companies will also report on their membership of codes of practice such as the government-backed Prompt Payment Code, which promotes a 60-day maximum limit.
The proposals are linked to the recent ‘Building a Responsible Payment Culture’ and the consultation on requiring large and quoted companies to publish detailed information about their payment practices and performance.
The secondary regulations are likely to be laid early in the next Parliament, with the requirement coming into force in April 2016.