Minister Nash encourages all businesses to sign up to the Prompt Payment Code of Conduct
I am delighted to formally launch the Prompt Payment Code of Conduct portal. This new initiative is a key deliverable under the Action Plan for Jobs and represents an important step in addressing the culture of late payments in Ireland. The introduction of the PPC will continue the Government’s drive to get credit flowing in the Irish economy by encouraging prompt payment for all business transactions.
“This is a significant step towards driving a change in payment culture in Ireland”
The economic crisis has presented significant challenges across enterprise in Ireland, but for SMEs in particular the issue of late payments is of critical concern. Late payments in commercial transactions have an adverse effect on businesses by straining cash flow, adding financial costs and fuelling uncertainly for many businesses. Companies providing goods and services need cashflow certainty and are entitled to expect that their payments will be made in a timely manner. Getting paid on time can mean the difference between a company staying in business and going under.
In addition to improving our payment culture, the Code is also about encouraging and promoting best practice between businesses and their suppliers. It is about companies demonstrating a real commitment to responsible business practices which in turn leads to achieving competitive advantage in the market place.
That is why the Prompt Payment Code of Conduct portal is so important. I would like to acknowledge the important contribution made by the Irish Institute of Credit Management (IICM) and the main business representative bodies – ISME, SFA, Chambers Ireland and IBEC – with support from the Banking and Payments Federation of Ireland, who have worked extremely hard with my Department to ensure this initiative is delivered and who are committing to building a responsible payment culture across enterprise in Ireland.
For the Code to work we need enterprises to sign up and I will be encouraging all businesses, big and small, to make this important commitment. Government will be leading by example and I will ensure that all Government Departments, their Agencies and Public Sectors bodies become signatories to this Code.
Signatories to the Code agree to:
Pay suppliers on time
- within the terms agreed at the outset of the contract, or 30 days, in accordance with legislation
- without attempting to change payment terms retrospectively
- without changing practice on length of payment for smaller companies on unreasonable grounds
Give clear guidance to suppliers
- providing suppliers with clear and easily accessible guidance on payment procedures
- ensuring there is a system for dealing with complaints and disputes which is communicated to suppliers
- advising them promptly if there is any reason why an invoice will not be paid to the agreed terms
Encourage good practice
- by requesting that lead suppliers encourage adoption of the code throughout their own supply chains
Why become a signatory to the Code?
If you pay promptly it is a real benefit to your supplier and potentially to you, the customer, as you could benefit by receiving more favourable pricing or service, which could make you more competitive.
Once approved, you can use the PPC Seal on your documentation and website to demonstrate that you are serious about prompt payment practice.
The Irish Institute of Credit Management is pleased to administer the Prompt Payment Portal.
Cashflow is important in every company and the timeliness of when the invoice is settled is vital. Being paid to agreed terms is the only way that projected margins from sales can be achieved. Companies need to pay to agreed terms to allow cash to flow smoothly within each part of the supply chain. The Prompt Payment Code is about encouraging and promoting best practice between organisations and their suppliers.
Shay Waldron, Director of Education. IICM is delighted to be afforded the opportunity to work with the Department for Jobs Enterprise and Innovation and all stakeholders in the Prompt Payment Code. The PPC will bring about the necessary culture change in paying suppliers to ensure that Ireland has a level paying field with its European neighbours. To compete internationally we need to look to home first and ensure that we play fair, by paying fair. The adoption of the Prompt Payment Code will ensure that suppliers and customer’s develop mutually beneficial relationships based on trust.
Getting paid on time
It is important that your invoicing procedures are accurate and timely to ensure you can get an invoice approved and paid promptly.
Read here to learn what best practices can help your existing process.