Sign up to the Prompt Payment Code - Your Voice Matters

I've talked about large customers and late payment many times over the past few months. Back in May I remarked that this behaviour is a form of commercial blackmail, and added that it's usually accompanied by the unspoken threat that the customer will delist the supplier and take its business elsewhere if the supplier doesn't knuckle down and accept the situation.

The Prompt Payment Code won't give any SME an instant way out of this situation - but it's worthwhile taking the time to sign up to the Code because - in the last analysis - public opinion carries weight and is capable of changing the moral climate.

Signing up to the Code is simple. Here's what you will need to agree to:

• Paying your suppliers on time within the terms agreed at the outset of the contract without attempting to change payment terms retrospectively and without changing practice on length of payment for smaller companies on unreasonable grounds.
• Giving clear guidance to your suppliers.
• Providing your suppliers with clear and easily accessible guidance on payment procedures, and ensuring there is a system for dealing with complaints and disputes which is communicated to them.
• Advising your suppliers promptly if there is any reason why an invoice will not be paid to the agreed terms.
• Encouraging good practice by requesting that lead suppliers encourage adoption of the Code throughout their own supply chains.

You will be asked to supply two references to prove that your own Company pays its suppliers promptly, and you will notice that there is a Data Protection Notice at the bottom of the application form which states:

Institute of Credit Management (Services) Limited and its group companies will use your information including without limitation your personal information ("Information") for the purpose of registering your organisation as an approved signatory to the Prompt Payment Code. We may need to disclose your Information to our service providers and agents for these purposes.

By submitting your application to become an approved signatory to the Prompt Payment Code you consent to the display of your organisation name and postcode (which may include your personal information if you are a sole trader, partnership or other unincorporated organisation) on this website which may be viewed by anyone accessing or visiting this website. In addition by submitting your application you consent to the sharing of your Information with the Department for Business Enterprise and Regulatory Reform (BERR).

Don't be afraid of that - think of it as free (and potentially very advantageous!) advertising - and don't be concerned that your Company is very small in comparison with those organisations that are advertised as having signed up already.

Your voice, and your vote, and your participation in the Code and what it stands for and is trying to achieve, matters a lot. You can only encourage other people to adopt the Code if you first adopt it yourself and make it obvious that you have done so.

If it makes any difference to your thinking about the validity and usefulness of the Code: the Forum of Private Business is targeting the public sector at the moment. It intends to 'name and shame' those with poor payment practices, and highlight the work of those Councils and Health Trusts that do pay their suppliers on time. The FPB has submitted a series of Freedom of Information Act requests to every single Council and Health Trust in Britain (all 700 odd of them) asking how long they take to pay their suppliers (many of whom are small businesses).