S3 E10: “PAYING FOR GOOD” PODCAST ON ‘The Prompt Payment Code’ with Philip King, Interim Small Business Commissioner

“Why it’s important to pay on time”

25th MARCH 2021

This week on my ‘PAYING FOR GOOD’ podcast, my special guest is Philip King, interim Small Business Commissioner, and we discuss the Prompt Payment Code.

The code, which went live on 24 December 2008, ensures that small businesses are paid on time, therefore improving the culture of payments in the UK. It has 2,700 signatories from small to large businesses in the private and public sectors. It’s very likely that your business relies on the products and services provided by many small businesses.

We take it for granted that our employees must be paid on time. This commitment must follow through to suppliers, who are business partners, so that they can pay their employees on time. Without the cash flow, small business owners are under considerable financial, physical and emotional strain, and so are their employees and their families.

Investors have a special interest in finding out how you treat your small suppliers because this is likely to reflect your dealings with employees, and the culture and sustainability of your business.

When you listen to this episode, you will learn from Philip about:
• the three principles of the Prompt Payment Code
• what happens to big businesses when they fail to pay on time
• what small businesses can do if they’re not being paid on time.

As we emerge from the pandemic, more people will leave the corporate world, voluntarily or not, and some will opt to set up their own small business. Managing cash flow is probably not their favourite activity. If that’s you, the Prompt Payment Code is here to help.

Your action takeaway from Philip:
Big businesses: Embrace your responsibility to help your small suppliers stay in business, which is important both for them and for you as a recipient of their services.

Small businesses: Ask your big customers four questions:
1. Who am I supplying? Invoice the right entity.
2. When am I going to get paid? Agree this in writing.
3. How am I going to be paid? Understand your clients’ payment systems.
4. Where is my money? If you don’t get paid on time, chase your client!

Investors: As a responsible investor, your reputation and that of your portfolio companies is at stake if they don’t pay their small suppliers on time. Use the Prompt Payment Code as a tool in your ESG (Environmental, Social and Governance) toolkit.

As always, if you have any questions on the topic of Responsible Reward, feel free to email me at client.care@peoplenet.ltd.uk or book an introductory call here.