'˜Now you can check up on payment performance'
NEW regulations designed to help small businesses get paid on time came into force this month, with a requirement for larger companies to publish information about how long they take to pay suppliers.
The requirement affects companies and LLPs who exceed two or more of the qualifying thresholds at the date of their last two balance sheets. The thresholds are based on the definition of ‘medium-sized’ under the Companies Act 2006 and are an annual turnover of £36m, a balance sheet total of £18m and an average of 250 employees during the year.
Now, those qualifying have to publish information on a government website about their payment practices and policies and how they have performed against them, including the average time taken to pay suppliers, and to update the information every six months.
Commercial law expert Michael Dyer of Verisona Law solicitors said: ‘It’s important that larger businesses check whether they are required to report under the regulations, and must then keep an eye on the thresholds as these will be updated over time. Smaller businesses can ask new customers whether they are required to report and, if they are, check out payment performance as part of their pre-contract checks.’