CICM-originated Prompt Payment Code moves to Small Business Commissioner’s office
10 March 2020 – Press Release
The Chartered Institute of Credit Management (CICM) has confirmed it has transferred the hosting and administration of the Prompt Payment Code to the Small Business Commissioner’s office in line with the Government’s stated ambition to bring all late payment initiatives under a single umbrella.
Since its launch in 2008, the Code has played an important part in promoting a culture of prompt payment, committing signatories to pay 95% of invoices within 60 days and work towards 30 days as normal practice. In the last 12 months, businesses that have failed to honour those commitments have been removed, and only re-instated when a suitable remedial plan has been approved by the PPC’s Compliance Board.
Sue Chapple, the CICM’s interim Chief Executive, says it makes perfect sense to streamline payment issues under the Commissioner’s remit. She says it makes particular sense to transfer the Code now following the appointment of the Code’s originator, Philip King, to the post of interim SBC:
“Small businesses want a single body to whom they can turn for advice,” she says, “and by transferring responsibility for the Code to the Commissioner’s office, we can ensure the Code receives the investment and resources it needs to continue its success in transforming the payment landscape and promoting best practice.”
Plans were first proposed to transfer the Code in the Government’s 2019 consultation, ‘Creating a responsible Payment Culture’. The Government said at the time: ‘We want to increase the number of people signed up to the Code, where good practice can be recognised by their customers and suppliers. Signing up to the Code is voluntary, so we will be working with the Commissioner and trade bodies including the CICM to help increase the number of businesses on the Code, including targeting those we know are already meeting the standard through their PPR data.’
To date there are more than 2,500 signatories to the Code. In the last 12 months, and a change in policy to allow those who had failed to honour their Code commitments to be named publicly, 55 businesses have been suspended and 26 re-instated, the latter having demonstrated a substantial improvement in payment performance that warrants re-instatement.
“This is the Code working at its best,” Sue continues. “Throwing people off is the easy part, but what encourages me, and shows that the Code has real power, are the actions taken by half of all those suspended to have their businesses re-instated. That says to me that they want to be seen to be fair to their suppliers, and they recognise the harm that can be done to their brands by failing to comply.
“A properly resourced Code with a clarity of purpose can make a real difference.”
For further press information, please contact:
Sean Feast or Iona Yadallee – Gravity Global
0207 330 8810 or 07778 045975
Notes to editors:
The Prompt Payment Code (the Code) was set up by the Chartered Institute of Credit Management (CICM) on behalf of government, in order to promote a culture of prompt payment. Signatories to the Code agree to pay 95% of invoices within 60 days and work towards 30 days as normal practice, plus commit to other standards of good practice such as not retrospectively changing payment terms. The Code also requires signatories to give clear guidance to suppliers on payment procedures, ensure a system for dealing with complaints and disputes is communicated to suppliers and to avoid any practices that adversely affect the supply chain. As payment practices have knock-on impacts through the supply chain, the Code also requests that lead suppliers in a supply chain encourage adoption of the Code throughout their own supply chains.