The government has issued new requirements for reporting on the payment practices of all 'large' businesses. Whereas previously this information was covered within annual financial statements, it will now be published on a central database where it will be available to all.
The Payment Practices and Performance Regulations 2017 has been introduced in response to difficulties experienced by small suppliers to large businesses when payments for goods or services have taken a long time to process.
Although the new regulation does not specify length of payment terms, it does create a culture of transparency and 'best practice' which should help bring some consistency to payment practices by large businesses.
As a first step, I would recommend companies review their existing processes and procedures to decide if they are happy for them to be published. It is also a good time to ensure that accounting systems are capable of producing the data required and that staff are trained to know what data is required by the new regulations.
The report must be signed by a named director, and must normally be filed every six months on the web based service provided by the government (unless the accounting period of the business is not 12 months). It must be filed within 30 days of the period end which the report covers. Non-filing of the information or filing false or inaccurate information is a criminal offence which can result in a fine. The responsibility to comply rests with every director or designated member of the business.
We are working with businesses to ensure that they are compliant with the new regulations if you would like further advice on the Payment Practices and Performance Regulations 2017 please contact me.