The Prompt Payment Code Background
The Prompt Payment Code (PPC) is a voluntary code of practice for businesses, administered by the Office of the Small Business Commissioner (SBC) on behalf of BEIS. It was established in December 2008 and sets standards for payment practices between organisations of any size and their suppliers.
The Ethos of the Code
Signatories have always undertaken to:
1) pay suppliers on time, within agreed terms;
2) give clear guidance to suppliers on terms, dispute resolution and prompt notification of late payment;
3) support good practice throughout their supply chain by encouraging adoption of the Code.
The Code has subsequently been strengthened and requires signatories to undertake to pay 95% of invoices within a maximum of 60 days, work towards adopting 30 days as the norm and avoid any practices that adversely affect the supply chain.
Signing up to the Code: Click here to sign up.
Suspensions and Removals
Large businesses that have submitted data to Government’s Payment Practices Portal revealing payment of less than 90% of invoices within 60 days will be suspended from the Code, until they achieve at least that percentage. If a suspended signatory fails to engage with the PPC administrators, or compliance is not achieved within a reasonable timescale, the signatory will be permanently removed from the Code.
When a signatory’s payment practice is challenged, the PPC administrators will investigate and achieve a positive outcome through mediation with both parties wherever possible. If this fails to achieve a satisfactory outcome and the Compliance Board determines that the payment practice is non-compliant, the signatory may be removed from the Code.