In response to the Duty to Report regulation coming into force today, research from Bottomline Technologies latest UK Payments Barometer Report reveals that UK businesses are still suffering from unacceptable levels of slow payer ethic, and is warning that large businesses can no longer hide behind process and complexity when it comes to payments.
This follows an upcoming report from Bottomline, which will reveal that on average 38 per cent of UK financial decision makers claim slow payer ethic is their single greatest challenge to getting their businesses’ invoices paid. Most worryingly, almost half of respondents from small to medium sized enterprises (SMEs), cited this to be their biggest issue.
This is despite the Duty to Report regulation coming into force today in the UK. The regulation follows the Small Business, Enterprise and Employment Act 2015, in response to the £41.5bn overdue payments owed to SMEs, by large businesses. Under the new rules, large businesses and limited liability partnerships (LLP), are obliged to publish information about their payment practices and performance twice a year on a government services database. Non-compliance is a criminal offence for which both the company and its directors will be liable to a fine on conviction.
Interestingly, when it came to the main reason behind invoices that were being paid successfully on time, almost half of businesses cited having collaborative customer relationships. This was over other methods such as automated Direct Debit and approved supply chain finance arrangements.
Ed Adshead-Grant, general manager, payments at Bottomline Technologies, said, “It is simply not good enough that almost half of our small to medium businesses, the lifeblood in our economy, are suffering from slow payer ethic.
“The Duty to Report rules are a wake-up call not only to large businesses, but to every business. Not only is there an onus to ensure payments are promptly made to suppliers within agreed timescales, but also a bold reminder to businesses that they have a right to payment without undue delay. Modern payment technology is one way in which businesses can introduce more visibility on cashflows and facilitate effective dialogue between customers and suppliers, to solve any payment issues quickly.”
The full report, Bottomline Technologies’ UK Payments Barometer 2017, will publish in May. Bottomline Technologies is an approved signatory of the Prompt Payment Code as managed by the Chartered Institute of Credit Management.