Big companies in the UK are being told by the government to pay their suppliers within 30 days of receiving their invoices.
That timeframe represents a halving of the 60-day period within which companies have previously been advised to pay their suppliers.
The government is carrying out what it is calling a crackdown on late payments by big companies, primarily to help smaller firms avoid serious cashflow problems and insolvency.
The issue of late payments is well understood to be a major headache for SMEs across the country, large proportions of which see their cash flow situations routinely squeezed as a consequence of having their invoices paid late by client companies.
A Prompt Payment Code (PPC) has been established by government and signed by more than 3,000 big companies but problems with late payments have continued so fresh action is being taken.
A revised PPC insists that 95 per cent or more of payments to supplier firms should now be made by big companies within 30 days, rather than 60 days.
Additionally, chief executives and finance directors are being instructed to make personal commitments to uphold the policies outlined by the PPC in the knowledge that breaches can be officially investigated.
