Small Company Law Changes – Part 2 – 2016

Do you have a problem getting paid on time? Do you contract into larger organisations and would like to know how likely and how quickly you are going to get paid? This can be a huge problem for small and growing businesses. You’re usually invited into a pitch for a huge contract, which would be transformational for your business, then scrutinised to the ninth degree about delivery, price, incentives, policies and procedures:

“Thank you for that presentation, candidate #10. Do you have any questions for us?”

“Yes, are we going to get paid or are you just going to manage us and strangle our cash flow?”

“I’m sorry did I say something wrong?”

Help is on hand. The Law will ask that question for you. From April 2016 the later parts of the Small Business, Enterprise and Employment Act 2015 (s3) are due to come into effect. From April, large companies will be expected to report on payment practices and policies. The key terms are:

• 6 monthly open source information made available including
• standard payment terms
• average time taken to pay
• proportion of invoices paid beyond agreed terms
• how many invoices paid between 31 and 60 days
• how many paid beyond 60 days
• the amount of late payment interest owed and paid
• whether financial incentives were required to join or remain on supplier lists
• any dispute resolution processes
• the availability of e-invoicing and
• referred supplier lists

So there’s a bit of a helping hand on the way for SMEs, start-ups and owner managed businesses, to help you do your due diligence on the person you’re about to go into business with. This will hopefully help ease your credit worries in 2016. Please call me if you’d like to discuss this or any other aspect of the above.

David

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January 11, 2016 at 6:04 pm
Category: Legal updates

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