Business Secretary Lord Mandelson today launched a new Code of Practice to help increase the speed of payments to smaller companies.
The code aims to induce prompt payment and regularity in contracts for business-to-business deals. While not mandatory, leading suppliers are being urged to pledge their conformity to it and use it to underline their business credentials.
“I am very pleased we have been able to reach agreement on the code today. The code focuses on ensuring firms pay their suppliers on time and do not attempt to change their payment terms retrospectively. This will be essential to help smaller firms maintain cash flow in the months ahead,” said Mandelson.
“I want the maximum number of businesses to sign up to it and I will be convening another meeting in a month’s time to track progress.”
The details of the code were released at a summit where Mandelson and other members of BERR met with companies including John Lewis, Asda and British Gas. The code was drawn up in partnership with the Institute of Credit Management.
The code will be available, accompanied by best-practice tips, at berr.gov.uk.