Become part of a prompt payment culture and boost your reputation
There are over 80 different government supports available to small businesses but many of them are not well known or understood. Each week in the SFA e-zine, we will profile a different support that could improve your business, giving you information and advice.
Prompt Payment Code
Voluntary code of practice for businesses committed to paying suppliers on time.
Those signing up to the Prompt Payment Code pledge to:
1. Pay suppliers on time:
- Within the terms agreed at the outset of the contract, or 30 days in accordance with legislation where no contractual terms exist
- Without attempting to change payment terms retrospectively
- Without changing practice on length of payment for smaller companies on unreasonable grounds
2. Give clear guidance to suppliers:
- Providing suppliers with clear and easily accessible guidance on payment procedures
- Ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers
- Advising them promptly if there is any reason why an invoice will not be paid to the agreed terms
3. Encourage good practice:
- By requesting that lead suppliers encourage adoption of the code throughout their own supply chains
Getting paid on time is a never-ending concern for anyone in business, especially small firms. Late payment causes serious cash flow problems, requires firms to extend overdraft facilities and in some cases can even lead to insolvency and bankruptcy.
The Prompt Payment Code was developed by business for business with the aim of improving cash flow between business and moving towards a culture of prompt payment in Ireland.
The benefits of being a prompt payer include:
- It enhances your reputation which makes you more attractive to suppliers
- A culture of prompt payment promotes cash flow in both directions – you pay your suppliers on time and you get paid for your sales on time
- You will avoid costly late payment interest fees and compensation costs
You can sign up at www.promptpayment.ie by filling out a very brief form with your basic company information and details for a primary contact person.
You will receive a toolkit that you can use to promote your prompt payment credentials, include a seal for your email signature, letterhead and other documents.
If you are interested in applying, don’t forget:
- Signing up for the Prompt Payment Code arrangement does not alter contractual relationships and does not change the legal position in relation to late payments
- The Prompt Payment Portal, www.promptpayment.ie, includes information and advice about credit management and the Prompt Payment Code. The Small Firms Association have written an article on ‘Getting Paid On Time’ in the Tips & Advice section
- Frequently asked questions are answered here
- The SFA and other business representative bodies have driven the creation of the Prompt Payment Code to address a serious problem for small businesses. We would encourage all member companies to become signatories and to be part of a nationwide solution.