Josh Hardie, CBI Deputy Director-General, said:
“Strong, collaborative supply chains are vital - when big, medium-sized and smaller business work together, the economy prospers. Payment terms are a vital part of healthy working relationships between companies.
“Firms have already done a significant amount to improve - since 2014, late payment debt has halved, and the UK has comparatively short payment terms set against other European countries. But with too many small and medium-sized firms still disproportionately affected by late payment, it’s right that policymakers are looking to drive down unfair and dishonest practices where they still exist.
“There are two areas business feels will drive improvement: increasing transparency of performance through developing industry league tables and encouraging adoption of technology to track payment performance with accuracy. Both Duty to Report and the Prompt Payment Code need to evolve further in support of these goals, so Government should work with business to ensure the requirements accelerate good practice.
“What gets measured gets done, but we know that a one-size-fits-all approach in this space rarely works. Any new measures must be business-led and reflect the dynamics of different industries. For many firms regardless of size, reliability of payment is as important as speed.
“For companies themselves, prompt payment is core to their reputations as well as their sustainable growth. Tackling this issue must be a board level conversation and all businesses must take accountability for their own practices seriously.”