Prompt Payment Code: IoD outlines reforms
The Institute of Directors (IoD) has outlined reforms to the Prompt Payment Code.
The IoD recently submitted its views to the government on how best to strengthen the Prompt Payment Code. These include establishing a transparent process for dealing with Code suspensions, removals and reinstatements, and implementing a traffic light system to make it easier for business leaders to identify companies with poor payment records.
According to the business group, the major issue in regard to late payments relates to culture and the leverage big businesses have over small suppliers. The IoD stated that small business owners are often reluctant to report a client that pays late as they would not want to damage the business relationship and risk losing future custom.
Administrators of the Prompt Payment Code should be able to approach signatories on the basis of an anonymous complaint by a third party to discuss payment practices, the Institute argued.
It has called for the government to bring forward reforms to the Code and create ‘a more responsible payment culture’.
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