The prompt payment initiative

17 May 2019.

The government has announced plans for a new prompt payment initiative. The government is planning new legislation to stop those who pay suppliers late from winning government contracts. The new prompt payment initiative looks set to be introduced in Autumn 2019 and it will mean that those businesses wanting to win government contracts will need to be able to demonstrate that they pay their suppliers promptly.

For the first time, failure of companies to demonstrate prompt payment to their suppliers could result in them being prevented from being awarded government contracts.

The initiative is set to be rolled-out in Autumn 2019 and will ensure the government only does business with companies who pay their suppliers on time, many of which are small businesses.

The move aims to promote a healthy and diverse marketplace of companies providing public services.

Cabinet Office Minister, Oliver Dowden said: “Companies providing crucial services to the public sector, like supporting prisons and delivering road infrastructure projects, must be paid on time.

“Paying invoices promptly is vital in providing healthy cash flow, particularly for smaller businesses who are the backbone of the UK economy, to help them survive and thrive.

“From next year, if government contractors are late with supplier payments, they could stop winning public contracts altogether – until they clean up their act.”

Why prompt payment matters

Cabinet Office Minister, Oliver Dowden commented “Paying invoices on time is vital for smaller businesses who are the backbone of the UK economy”.

Martin McTague, Policy and Advocacy Chairman for the Federation of Small Businesses (FSB), commented: “This measure will get the thumbs up from the small business community. This sends a clear message from Government that paying late is not okay.

“Cracking down on big businesses supplying to Government, and not paying on time, is a win for small businesses, taxpayers, the wider economy and public services. Measures to open up public procurement give taxpayers and our public services access to the innovation and value small firms bring, as well as helping our economy. This is a challenge, and there is, of course, more to do, but FSB recognises the policy progress that is being made.

“We have been pushing hard for this reform and it is good to know that the Government is listening. We will continue to work with the Government on this and further measures to drive out late payment from Government supply chains once and for all.”

James Roberts, Political Director of the TaxPayers’ Alliance, said “Getting involved in public procurement is a tough gig for small firms. In the past, bigger contractors have dragged their feet when paying smaller suppliers, causing them cash flow problems and leaving SMEs hesitant to take the work. These proposals finally do something about that. Making the process more small business friendly delivers the double whammy of driving down costs and supporting enterprise. Taxpayers should welcome these changes, which will ultimately mean more competition, lower costs and better services.”

The Public Procurement Review Service

The public procurement review service, formerly known as the Mystery Shopper, is a free anonymous complaints service for any supplier who is experiencing issues and concerns around procurements they are involved in or about the conduct of contracting authorities. The service has helped speed up payments totalling £5.2 million since 2011. You can find out more about the scope and remit of the service here.

You can use this service by sending an email to publiceprocurementreview@cabinetoffice.gov.uk Or you can call the team on 0345 010 3503

A new small business champion to help SMEs

In addition to this, the Prime Minister has announced the forthcoming appointment of a small business champion Minister to oversee the championing of small businesses and to help the Government meet the aspirational target of spending one pound in three with SMEs by 2022.

Hopefully the changes being made will put SMEs in a stronger place and give them the ability to scale and grow as they will have the cash flow available to enable entrepreneurship.

CPA is passionate about late payment

The Credit Protection Association has been protecting smaller firms against poor payment practices for over 100 years.

We are passionate about breaking the late payment culture that holds back the UK economy and threatens many SMEs with cash flow difficulties being the single biggest killer of Britain’s small businesses.

If you were regularly paid late we can help. Those former customers used you to boost their own cash-flow, regularly paying you late.

As a result you had extra costs, you had the distraction of having to chase payment, you had opportunity costs because your capital was tied up in their late invoices.

Under little used legislation, you are entitled to compensation for those late payments.

Now you can boost your own cash-flow.

CPA can help unearth the those hidden treasures.

We have the technology to reveal the compensation you are due and we have the extensive experience and expertise to then turn those claims into cash.

Yes, CPA can help you boost your business cashflow.

Don’t let your bankers control you,  contact CPA today.

CPA practices what it preaches

The Credit Protection Association has a policy of turning round invoices as quickly as possible and paying our suppliers as soon as the invoice is authorised. Many invoices are paid in the same week they are received. A large number the same day.

This is true, even if the supplier offers 30 days credit terms.

And we switched from paying most suppliers by cheque, to paying by bank transfer because we want our payment to arrive quickly and for it not to be unexpectedly delayed nor be a hassle to bank.

Why?

Because we are passionate about late payment and want to lead by example.

But what to do?

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

Do you realise you may have hidden capital tied up in your business?

There is no need to run to banks of other finance providers for extra capital.

Do you realise you may have a hidden source of capital within your business waiting to be activated?

If you trade with other businesses and were often paid late then you could be entitled to significant compensation.

Under little known and underused legislation your business could be due huge amounts in compensation that you didn’t even know about.

For years the businesses you sold to were ignoring rules on payment. Now you can be recompensed  for their ignoring rules and paying you late.

That compensation could be the cash injection your business needed.

Are you  thinking about retiring, closing the business down or going into insolvency?  If so this compensation could be an excellent way to maximise the return you get for their years invested in the business.

If you collect the compensation you are due on late payments then you could create a nice nest egg from the business or find the funds to rescue it from insolvency.

How can CPA help?

CPA has developed a unique technology to dig into your accounting records and discover the cash injection you are due by means of compensation. The software does all the hardwork. Our software interacts over the cloud with over 300 different software packages, working directly with your accounts package, just so long as it’s stored on a computer.

The Credit Protection Association plc (established 1914) has spent 3 years researching the accounting, technical and legal implications of Late Payment Legislation and our staff and retained solicitors probably have as much working knowledge of this legislation as could be found anywhere.

We recognise that most companies do not have the resources to spend time on the identification and calculation of Late Payment Compensation. Our service can produce an Analyses within just a few days with (usually) less than 30 mins of co-operation from our clients. We work directly with over 300 accounting packages but can also work with bespoke accounts packages. Indeed, speed is essential as the oldest invoices may fall foul of the 6-year time limit.

Once the Sales Ledger Analyses is made available to clients, all that is required is that management decide which commercially sensitive ex-customers to remove from the list and return it to us.

CPA then uses its years of collection experience to explain and recover the Late Payment Compensation Claims. Clients do not handle any part of the recovery process as our team will take all communications from the companies against who the claims has been made. Often, it’s simply a case of explaining the legislation, sometimes we have to go all the way and enforce the legislation through the courts.

The result is that we are realising clients’ claims worth tens and sometimes hundreds of thousands of pounds which, of course, is pure net profit.  You may also be among the recipients of “hundreds of thousands of pounds” should you elect to take advantage of our services.

We do the work, you receive the cash.

If you have supplied goods and services to businesses on credit and were regularly paid late then you could be due significant sums in late payment compensation.

We are talking to companies and unearthing claims in the hundreds of thousands from former business customers who paid them late. Large business customers who abused their power to inflict unfair and sometimes illegal payment practices.

We are helping companies that were looking to close down, who looked insolvent and finding that cash injection they need to avoid insolvency.

 

Read our blog here on how to crack down on the late payment culture.

Read our blog here on how to give late payers the slap they need.

visit our late payment compensation page

See our full blog and FAQ on late payment compensation

Do you have a problem with late payments?

The Credit Protection Association can help!

Formed in 1914, CPA has been providing credit management services to SMEs for over 100 years.

At the Credit Protection Association, we provide first class credit information that can help you avoid being over extended to customers who are at risk. Our monitoring service can flag up warning signs long before the end, giving you the chance to adjust and reduce your exposure. We provide recommended credit limits and credit scores on a traffic light system and can help you set appropriate credit policies for your customers.

We regularly publish lists of the latest insolvencies but by then it is too late. Our credit reports however predict approximately 96% of company insolvencies long before they arrive.

Companies in trouble usually have very bad bad cash flow and they try to deal with it by delaying payment to their suppliers, increasing your exposure to them.

If you supply to businesses on credit help us help you identify the risks. Spot those companies ignoring rules on payment and treat them appropriately.

Why use a third party collector?

As a third party collector, we can also get your payments prioritised over those who are not as hot on collections. When you customer receives a letter from the Credit Protection Association regarding their outstanding account, they are going to want to get that resolved as a priority. Our overdue account recovery service can get your unpaid invoices to the top of their “to do” list and get your invoice paid.

Over the years we have collected billions in overdue invoices for our customers.

Our debt recovery and credit management services give our members the financial freedom needed to grow and prosper, while our new Late Payment Compensation department could unlock hidden potential and offer the compensation needed to springboard your business to success.

The Credit Protection Association – Prompting Punctual Payments – Ethical, Effective, Efficient, Economical collections

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The Credit Protection Association is a credit management company established in 1914. If you supply goods or services on credit then we can help you!

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