ICM and Bacs highlight late payment issues
15 April 2010
Bacs Payment Schemes Limited (Bacs), the organisation behind Direct Debit and Bacs Direct Credit, has announced a working partnership with the Institute of Credit Management (ICM) to drive further awareness of the Prompt Payment Code and promote the importance of paying on time, across the whole business community.
Backed by the government, the Prompt Payment Code (PPC), launched by the ICM in December 2008, has been designed to encourage and promote best practice between organisations and their suppliers. The Code is hosted by the ICM at www.promptpaymentcode.org.uk.
Philip King, chief executive of the ICM believes there is a very clear need to change the payment culture within the UK. “To this end, it is important for organisations such as the ICM and Bacs to combine wherever possible where there are shared objectives and a common desire to improve the payment performance of UK businesses.”
Bacs, a not-for-profit organisation, has invested in researching the issue of late payments and raising awareness of its impact on all businesses, particularly SMEs since 2004.
Philip adds “In difficult times it pays to choose your customers wisely and when business survival relies on getting paid, businesses shouldn’t take anything for granted. ‘Knowing your customer’ becomes the key imperative. Unless a business knows exactly who it is trading with it can’t make informed decisions regarding how much credit it should extend, nor on what terms.”
The latest wave of Bacs’ late payments research carried out in December 2009 revealed that British SMEs are having to wait an average of 41 days longer than their original agreed payment terms, before invoices are paid. This was an increase of 9.5 days on the time SMEs were waiting, beyond agreed deadlines, in June 2009.
As an extension of this activity, Bacs will be working with ICM on a number of initiatives to further raise awareness of the issue, with the aim of positively impacting on entrenched business practices.
Mike Hutchinson, head of marketing at Bacs, said: “Our extensive research over many years has highlighted the extent of the late payments issue in the business community. Through our strategic partnership with ICM we hope to add momentum to the Prompt Payment Code, help inform businesses both large and small, and promote best practice, such as direct payment into bank accounts using methods such as Bacs Direct Credit.”