Prompt Payment Code: Who Qualifies and What You Get
Learn how the Prompt Payment Code helps ensure suppliers are paid on time and what it takes for businesses to sign up.
The Prompt Payment Code is a voluntary agreement designed to ensure that businesses pay their suppliers within a set timeframe. It focuses on improving cash flow for businesses by encouraging timely payments across the supply chain.
Who it's for
This scheme is specifically for businesses that choose to become signatories to the code. By joining, a business moves from simply following standard industry practices to making a formal, public commitment to its suppliers regarding payment timelines.
What you get
The primary benefit is the ability to demonstrate a formal commitment to pay suppliers within 30 days. This status serves as a signal to your partners and the wider market that your business prioritizes healthy cash flow for those who provide your goods and services.
What it costs you
There is no direct fee mentioned for joining the code. Instead, your business will need to dedicate time and resources to ensure your internal finance systems align with the requirements of the code. This ensures your payment processes are reliable enough to meet the standards expected of a signatory.
The catch to know
The most important thing to understand is that being a signatory involves specific performance expectations. Most people miss the requirement to meet a 95% payment target. This means you must ensure that the vast majority of your payments are made according to your promised terms to remain in good standing.
How to apply
- Visit the official portal to learn more about the code.
- Review your current payment processes and how they compare to the code's standards.
- Prepare your business to meet the specific payment targets required for signatories.
- Submit your application through the official website.