EOW Reflections: Awarding good behaviour

What an evening we had. We met yesterday to celebrate the new Fair Payment Code and present Awards to those firms that had Applied and complied with the requirements of the Gold, Silver and Bronze categories.

The Office of the Small Business Commissioner was created in 2017 to help smaller suppliers deal with payment disputes with their bigger customers. We offer a free dispute resolution service and are successful at helping suppliers get money owed to them in 99.9% of cases we can deal with.

Often the amounts owed seem so small as to be insignificant to the customers who’ve neglected to pay on time. All amounts, no matter how small, are very important for the sustainability of small suppliers. Overdue invoices cause sleepless nights, worry about paying bills and employees, and can result in mental health problems and small suppliers going bust. We need sustainable, resilient supply chains and therefore we need smaller suppliers to get paid on time, and on fair payment terms in contracts, so they have the certainty to invest, thrive and grow. Everyone Benefits.

As part of the Government’s drive to improve payment practices across the UK we have also for the past 4 years administered the previous Prompt Payment Code. We could see that while it had several thousand signatories it lacked robust compliance checking capability and we needed a code that was underpinned by values and principles to drive better payment behaviour.

We’ve worked on the new Fair Payment Code over the last three years and launched the Gold, Silver and Bronze Awards in December last year.

I am delighted that yesterday evening we handed out the first set of awards. We have had more than 1000 expressions of interest from firms intending to apply. We have already made more than 100 Awards. Many of those winners were in the magnificent Carlton Room at the Institute of Directors last night, as were some firms working through the process to achieve their Award. We recognise this is onerous for many firms and has taken longer than expected for some.

Getting an award from the Fair Payment Code is challenging. This is not a Code to which you can simply sign up with good intentions. This is a Code that rewards you for doing what you say you are doing: paying your suppliers fairly with fair contractual payment terms, and quickly, with payments that are within agreed terms, all within 60 or if possible 30 days.

Thank you for all the hard work the Award winners put into the process. Yesterday evening we presented awards to those winners who were able to join us. We will say thank you and congratulations separately, to Awardees who weren’t able to join us. And a huge thank you to the OSBC team for helping the Award winners achieve their goals and to everyone who made the evening a success. Many Award winners told me last night how grateful they are for the help they’ve had from the OSBC Code team.

All of this work is about achieving better outcomes for smaller suppliers so that they are resilient and supply chains as a result are resilient. It’s about helping bigger customers understand how the smaller suppliers in their supply chains work and the challenges they face if they aren’t paid by the date agreed or are asked to wait 60/90/120 days for payment. It’s about giving smaller suppliers the chance to decide to work with customers who have achieved an Award and are committed to behaving fairly as set out in the Fair Payment Code. It’s about putting in writing how the suppliers and customers will work together to get the job done and what will happen if there is a dispute about payment, but with the intention of avoiding any dispute.

Small suppliers at best struggle when payments are promised and don’t arrive on the agreed date, or the agreed date is months away. At worst they go bust while waiting. We need a culture where neither of these scenarios is acceptable. We’re building that Fair Payment culture throughout the UK, one business at a time. It may take some time, but we will achieve this together. Join the Fair Payment Code. Last night was just the beginning.