The Chartered Institute of Credit Management (CICM) will be putting new rules for the Prompt Payment Code (PPC) into effect on September 1st 2019 which aim to protect SMEs from late payments.
Companies could be blocked from bidding for government contracts worth over £5m if they fail to pay 95% of their invoices within 60 days.
Tim Boag, group managing director of business finance at Aldermore (pictured above), stated that the government initiative would help “increase accountability” and support the SME community.
“This is a huge step in the right direction of finally tackling the issue of late payments,” said Tim.
“On average, a business suffering from late payments will be owed £34,000, our research found.
“This unpaid debt can be the difference between being able to pay an employee’s salary or pursue a new business opportunity.
“We hope we see further action taken to ensure prompt payment for all suppliers.”
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