The Fair Payment Code is one key tool contributing to this goal. This month marks one year since the Fair Payment Code was announced. Here’s how the Fair Payment Code has been making life easier for small businesses and benefitting businesses of all sizes this year.
Providing a trust mark
As a fellow founder, I know the familiar knot in your stomach when you’re chasing yet another overdue invoice. You’ve delivered the work, exceeded expectations, but your payment is sitting with another business while your own bills pile up. If you’re nodding along, you’re not alone. Research shows that UK small businesses spend 86 hours chasing late payments.
To join the Fair Payment Code, firms of all sizes must prove their payment practices meet our Gold, Silver or Bronze Award standards. The Code not only rewards those fantastic businesses that are exceptional payers, but it’s a trust mark for suppliers. Gold and Silver Awardees are committed to paying 95% of all small business invoices in 30 days; Bronze Awardees in 60 days. To save time chasing payments later on, businesses can check our Awardees Directory to see whether a potential customer is a fair payer.
Setting businesses apart from the competition
This in turn has a direct benefit for Awardees. According to the UK Government’s latest research, 15% of surveyed businesses say they have avoided doing business with customers based on their payment behaviour. By achieving a Fair Payment Code Award, businesses are making themselves more attractive to potential suppliers. This has been the experience of AJ Quinn Building Contractors, a Bronze Awardee. They told us that their Award was setting them apart from their competition, and that quality suppliers were choosing to work with them over their competitors because of their commitment to fair payment.
Strengthening Supply Chains
Of course, what this all comes down to is relationships. Rob Hubbard CEO of Learning Age Solutions, a Silver Awardee, knows that successful businesses are built on successful relationships, not just with your suppliers but the relationships up and down the whole chain. As Rob puts it, “no one company operates alone – UK business is an ecosystem”. I agree with Rob. Business relationships are built on trust and when suppliers see that you are as good as your word, they trust you more. As he says, through “treating suppliers fairly, we can ensure that everyone flourishes, and growth is strengthened”.
Get ahead of the game with support from the OSBC
As Small Business Commissioner, I can say that the momentum to improve prompt payment is building. The UK Government is asking more of its major suppliers to pay their own suppliers quicker and on time. The Department for Business and Trade has launched its “Plan to back Small Businesses”, which includes a consultation on legislation to tackle late payments. Businesses that apply to the Fair Payment Code can get access to support from our expert team, who can advise you on developing your payment practices to meet these changes. There’s never been a better time to send us your application.
It’s only been one year of the Fair Payment Code and I’m really proud of the impact it’s had so far and hopeful for what we can achieve in the year ahead. Those organisations that have joined the Fair Payment Code are not only benefitting their own businesses, but helping to pioneer a fairer, more sustainable business environment for all. We know there is still work to be done, but it’s great to see the Code making life a little bit easier for small businesses.
Express your interest in the Fair Payment Code.
