The Fair Payment Code (FPC)

The Fair Payment Code (FPC), recently launched by the UK government and administered by the Office of the Small Business Commissioner (OSBC), aims to enhance payment practices among businesses, particularly benefitting smaller entities. This initiative introduces a tiered award system—gold, silver, and bronze—that helps businesses identify reliable partners committed to fair payment practices.

Award Tiers

The FPC establishes three distinct award levels based on payment performance:

Gold Award: Granted to businesses that pay at least 95% of all invoices within 30 days.

Silver Award: For businesses that pay at least 95% of all invoices within 60 days, including at least 95% of invoices to small businesses (those with fewer than 50 employees) within 30 days.

Bronze Award: For businesses that pay at least 95% of all invoices within 60 days.

Businesses receiving these awards must also adhere to the principles of being Clear, Fair, and Collaborative with their suppliers.

Duration and Compliance

Each award is valid for two years, after which businesses must reapply to maintain their status. A robust complaint system will be in place to address any non-compliance with the award criteria or the principles of the code.

Addressing Late Payments

The introduction of the Fair Payment Code is a critical response to the ongoing issue of late payments that significantly impacts small and medium-sized enterprises (SMEs). By setting clear standards for payment timelines, the FPC aims to improve cash flow for these businesses, thereby supporting their growth and sustainability.

For those seeking practical assistance in managing late payments and improving payment processes, resources and support are available from the OSBC.

For further guidance please call Gary Brown on 023 8046 1240 or email Gary Brown.