Garrod Beckett and Co urges SME leaders to check payment status of large suppliers when doing business

Published by Rhys Taylor-Brown on March 24th 2022, 8:01am

Essex-based chartered accountancy firm, Garrod Beckett & Company Ltd, has called on executives of small and medium-sized businesses to be wary of larger companies abusing their position by making late payments.

The issue is something that the government has been working on combatting for a number of years, with a legal requirement first introduced in April 2017 ordering large businesses to publicly report their payment practices.

As Garrod Beckett & Company owner Paul Garrod points out, a large business under the terms of this legal requirement is defined as a company or limited liability partnership that boasts at least two out of a £36 million per year turnover, £18 million on its balance sheet, or 250 employees on its books.

Garrod highlights: “Large businesses within the scope of the rules must prepare and publish information about their payment practices and performance in relation to qualifying contracts. There are normally two reporting periods within the business’ financial year. The report must be submitted within 30 days of the end of the reporting period. It is a criminal offence by the business, and every director of the company or designated member of an LLP, if the business fails to publish a report containing the necessary information within the specified filing period of 30 days.”

For each reporting period, these large businesses must report on the following aspects in relation to qualifying contracts:

1. The average number of days taken to make payments in the reporting period, measured from the date of receipt of invoice or other notice to the date the cash is received by the supplier.

2. The percentage of payments made within the reporting period which were paid in 30 days or fewer, between 31 and 60 days, and in 61 days or longer.

3. The percentage of payments due within the reporting period which were not paid within the agreed payment period.

Garrod continues: “You can check a large supplier’s payment status at www.gov.uk/check-when-businesses-pay-invoices#more-information.”


Photo by rupixen.com on Unsplash

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Authored By

Rhys Taylor-Brown
Junior Editor
March 24th 2022, 8:01am

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