Firms including Microsoft, IBM, Fujitsu, and HP sign up for new Prompt Payment Code
Some of the biggest suppliers to government, including IT giants Fujitsu, HP, IBM, and Microsoft, have backed a government pledge to pay suppliers within 30 days.
A total of 32 suppliers to Whitehall have today voluntarily committed to the Prompt Payment Code, which requires firms to pay 95% of invoices within 60 days and move towards adopting 30 days as the norm.
According to government figures, small and medium-sized enterprises in the UK are collectively owed more than £26bn in overdue payments. It is an issue that Margaret Hodge, when chair of the Public Accounts Committee, called on the government to do more to tackle.
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Suppliers to government are encouraged by the Crown Commercial Service to agree to the code, which has been in place since 2008 and is currently administered by the Chartered Institute for Credit Management on behalf of the Department for Business, Energy and Industrial Strategy.
As well as pledging to pay suppliers within 30 days, signatories also promise to give suppliers clear guidance on payment and to put in place a system for dealing with disputes, as well as encouraging good practice.
The firms signing up, which also include large outsourcers and systems integrators such as Atos, Capita, and G4S, account for around 40% of government procurement spend.
Cabinet Office minister Caroline Nokes said today’s agreements represented “a major boost to payment practices in the UK”.
“Paying invoices on time is vital in providing healthy cash flow to smaller businesses, to help them survive and thrive,” she said.