What are Payment Practices?

Every year numerous businesses grapple with significant administrative and financial challenges due to delayed payments, posing a substantial threat to their cash flow and trading capabilities, particularly impacting smaller enterprises. The Small Business, Enterprise and Employment Act 2015, along with the Limited Liability Partnerships Act 2000 for LLPs, mandates the largest UK companies and LLPs to periodically disclose Payment Practices, policies, and performance starting from the financial year commencing on or after April 6, 2017.

The report must be published on the web-based service (Gov.uk) provided by Government 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.

Businesses in scope must prepare and publish information about both the payment practices and policies which they have applied during a reporting period and their payment performance in that reporting period. In a financial year there are normally two reporting periods. The first is the six calendar months starting on the first day of the business’ financial year.

So, if a financial year started on the 5th of a month, the last day of that reporting period would be the 4th of the month, six months later. The second reporting period starts on the day after the first period ends and runs until the end of the financial year.

Company Watch now gather this data information on a daily basis to include in your decision making. Payment Practices are now available in the Company Watch portal.