Large UK companies are now required to report their payment practices. The Duty to Report Payment Practices applies to UK companies and UK subsidiaries that meet two or more of the following criteria:
1. £36 million annual turnover
2. Over £18 million balance sheet total
3. Over 250 employees
The first report is due 30 days after the first half of the financial year. Some businesses will need to start submitting information from October 2017. If your company’s financial year begins on or after 6 April 2017, the first report is due November 2017. The report must include your standard payment terms, and the percentage of payments due within the reporting period not paid within agreed terms. There are also requirements to report whether suppliers are offered e-invoicing and your process for resolving payment disputes.
Philip King, CEO of the Chartered Institute of Credit Management says the duty to report “will generate a level of peer pressure. Businesses will compare themselves with each other, and suppliers will do the same thing … just the fact of having to report on it – and that the reports will be signed off by a board-level director – means this is now a board room discussion and not a back office metric.”
So as payment terms are about to be in the spotlight soon, are you prepared?
Download our recent white paper to learn more about the requirements and what you need to know.
This white paper examines
- The conversations you should have at a board-level about long payment terms, and whether it may impact your reputation by having to publish your payment terms
- How to address inefficiencies in your procure-to-pay process that may be causing unintentionally late payments
- What you need to prepare for your report
While there hasn’t been much coverage of this, the requirement is still in place for large UK companies and UK subsidiaries.
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