In this 2-part blog, we take a look at the Prompt Payment Code – discuss what it is and what it could mean for your organisation. Then in Part 2 – we will tackle the challenges you might face and how you can solve these.
What is the Prompt Payment Code?
The Prompt Payment Code has been around for a few years now, with its purpose to set standards and best practice for achieving prompt payments to Suppliers, as well as having an influence on wider payment procedures. To date around 1800 organisations and public authorities have committed to the Prompt Payment Code.
Last September, Margot James, Minister for Small Business and Philip King, Chief Executive of the Chartered Institute of Credit Management (CICM) confirmed their support of the Prompt Payment Code and its positive effects.
“Prompt payment can make all the difference to small businesses, boosting their cashflow and allowing them to invest in growth for the future. Although we have seen some progress, there are still too many business owners across the country who have not been paid on time by their customers. We need a culture change to stamp this out and the Prompt Payment Code continues to play an important role in bringing this about, alongside a package of measures taken forward by government and industry.”
Margot James, Minister for Small Business.
A culture change is required to tackle this head on, but change could be slower than expected. This isn’t down to a lack of willingness to progress, but could be attributed to key challenges which face many organisations.
We have identified the key challenges as the following:
- Technology Adoption
- Data Quality of Purchase Orders Upstream
- Reporting and Analysis
In Part 2 of our blog, we will discuss these in more detail and how you can solve these to take on the Prompt Payment Code Challenge.
CloudTrade, a Science Warehouse partner, has also published a related article ‘Accelerate your AP process and meet the Prompt Payment Code.’
Take a look at our eInvoicing solution, which can help you to make payments prompter.