The Prompt Payment Code should be tightened to ensure limited companies are paid promptly, experts have urged.

Tuesday 19 February 2013

The Prompt Payment Code (PPC) should be changed to stop companies with payment terms as long as 90 days from signing up, according to the Forum for Private Business (FPB).

After Unilever and Sainsbury’s both announced their intention to sign up to the agreement despite having increased their payment times to 90 and 75 days respectively, FPB said that the moves were clearly against the spirit of the PPC even if they were permitted under its terms. Chief executive Phil Orford added that the rules needed to be tightened in order to prevent further abuse.

Mr Orford went on to say that larger companies with longer payment periods were deceiving the public to improve their own images, while they continued to cause problems for their smaller suppliers and contractors who could be waiting for up to three months to be paid.

Ensuring that bigger companies make prompt payments will boost cash flow for limited companies. PPC is intended to ensure that contractors and limited companies are paid as quickly as possible for their services.

By Victoria McDonnell

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