Small Businesses dealing with FTSE100 companies will be hoping that the Department of Business Secretary Peter Mandelson’s promise of a quicker turn around on payment will be adhered to by the larger corporations.
Many of the FTSE100 organisations have agreed to adhere to the Prompt Payment Code, the latest initiative from the government. The Code means that large corporations agree to pay suppliers in a ‘reasonable amount of time’ but also offers other benefits to small business.
FTSE100 businesses that agree to the Code will promise not to change payment terms retrospectively or on unreasonable grounds. The Code will also offer support to Small Business owners by providing a system for dealing with disputes if something does go wrong.
Mandelson said at the launch of the Prompt Payment Code, “The promise by FTSE companies to pay on time is very welcome and will hopefully bring an end to the devastating impact which late payments can have on small business.”
It is not clear exactly how many of the FTSE100 companies have agreed to the terms, surely they should be forced to by law. The government has made so many noises over this problem in the past with absolutely no effect, it is difficult to get excited by this latest development.
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