Government publishes plans to mandate reporting of payment performance
Large companies will have to reveal how quickly they pay their suppliers from April next year, under draft government regulations pulbished last week.
The ‘duty to report’ regime will require large companies and limited liability partnerships (LLPs) to publicly report twice yearly on their payment practices and performance, including the average time taken to pay supplier invoices.
The government hopes the move will put a spotlight on bad practice and lead to improved standards.
The overall level of late payment owed to SMEs stood at £26.8bn last summer, while on average 30% of payments are late, according to the Federation of Small Businesses (FSB).
Government will publish guidance on how to comply with the duty to report early next year, to help large businesses prepare for the new reporting requirements.
Annoucing the measures, small business minister Margot James said: “By shining a light on how large businesses pay their smaller suppliers, we want to empower small businesses and drive a real change in payment culture.”