IoD press release Increase awareness and accessibility to prompt payment reporting
In its response to the Government’s statutory review of the Reporting on Payment Practices and Performance Regulations, the Institute of Directors has called on the Government to increase the awareness and accessibility of payment practices and performance reporting. In particular, the IoD is calling for government to:
- devote more resources to increasing awareness of the service.
- publish ranked tables of payment times updated twice yearly.
- publish a headline indicator of the average payment time across all large companies, also updated twice yearly, enabling policy makers to track progress and allowing the performance of individual firms to be compared to this average.
The regulations introduce a duty on the UK’s large companies to report every six months on their payment practices, most notably on the average time taken to settle invoices issued by their suppliers. This provides suppliers with better information, so they can make informed decisions about who to trade with, as well as increase transparency and public scrutiny of large businesses’ payment practices.
However, an Institute of Directors survey of its members showed that less than 1 in 10 firms had used the service to check the payment practices of larger customers or clients. However, around half the respondents agreed with the statement ‘I was not previously aware of this service but will now use it in future’ (25% disagreed).
Kitty Ussher, Chief Economist at the Institute of Directors, said:
“We wholeheartedly support large companies having to report on their payment practices and performance. However, the existing service is not widely known about. We would therefore urge Government to devote more resources to increasing awareness of the service.
“Any transparency is likely to spur change, but in the absence of government-provided comparative rankings of the payment practices of larger companies, the ability to put reputational pressure on businesses to pay promptly is limited. The Government should look to present the information in such a way as to make scrutiny more accessible, such as through performance league tables. We are also calling on government to calculate and publish a headline average figure for payment times both to track progress and also allow the performance of individual companies to be tracked against this average.”
You can read the IoD’s full response to the statutory review here.
The IoD is a key supporter of Good Business Pays, a nationwide movement to encourage the UK’s largest companies to fast-track payments to smaller suppliers. It uses the data published by the Government, combined with surveys and feedback, to provide easy to use charts and metrics on the payment performance of many large UK businesses.
Full survey results
Conducted between 13th-30th December 2021. 435 responses, from only those whose organisations sell products or services to large businesses.
At present the government requires large businesses to publish data on the time taken to pay their suppliers. This data is published on a government website for anyone to see. To what extent do you agree or disagree with the following statements?