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New late payment measures to make contractors’ lives easier?

If there’s one thing that any contractor hates having to do it’s chasing down clients for payment – but this could finally be a thing of the past.

When you’re a little fish in a big pond filled with even bigger firms as your clients, convincing them to pay any outstanding invoices for services rendered can be like pulling teeth. Most larger firms brush you off for weeks or even months, and SMEs have had to just grin and bear it. Now, the Government has decided to throw a bone to SMEs in the form of a new series of measures that are aimed to make late payments a thing of the past – and while I’m skeptical of how effective these new measures will be I’m chuffed to bits to hear that at least something is being done.

Right now the new rules call for large companies to publish their payment practices, something that wasn’t compulsory before this. Firms will also find it easier to access invoice financing now that some legal barriers have been stricken down, but the changes on the horizon are even more hopeful: the Institute of Credit Management will be partnering with the Government to give the Prompt Payment Code some teeth. 

This is of course just the first few steps, and I’m convinced there will be plenty of push back from larger firms that can’t be arsed to pay their contractors promptly. I predict that these companies will do as little as humanly possible to comply with the letter of the law whilst completely circumventing the spirit, ending up in the changes having to be ramped up even further until there are some compulsory legislation put on the law books to make these firms play fair. Will the Government go that far? Well, who knows – big business lobbies certainly have more than a bit of sway in Parliament, so I wouldn’t be surprised to hear how large firms with deep pockets pull out all the stops to prevent these new rules from truly affecting them to any serious degree. I mean let’s face it: companies with cadres of accountants will find ways of getting around seemingly ironclad regulations regarding paying their fair share of corporation tax all the time, what’s to prevent them from finding loopholes in these new prompt payment regulations as well?

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