The Prompt Payment Code launched in December 2008, with the intention of making companies of all sizes in theUKpay their suppliers faster.
However, new figures from Experian show that the PPC has not had a unilaterally positive effect – instead, late payment has been something of a rollercoaster over the past four years.
As the PPC celebrates its fourth anniversary, Experian reveals that the typical overdue invoice in December 2008 was settled 23.5 days beyond the agreed deadline.
By July 2010, this had dropped to 21.1 days – suggesting that the PPC was having an effect.
However, in November 2010, the figure spiked to a massive 27.7 days beyond agreed terms, meaning invoices were being paid on average almost a month overdue.
Experian says small firms are still settling invoices at about the same number of days overdue as was the case in 2008.
However, the gap between big and small firms has closed – previously, large companies took 25 days longer than their smaller, more agile counterparts; this gulf has now narrowed to around 16 days.
Among the very largest companies signed up to the PPC, however, inertia is still apparent, and they actually pay slower than same-sized companies that are not signed up.
“Further improvement is needed across the board, and it is vital that firms of all sizes think about their collection strategies,” says Max Firth,UKmanaging director for Experian’s Business Information Services division.