How UK Businesses Can Meet the New Fair Payment Code Standards with Supplier Connect
In the UK, small and medium-sized enterprises (SMEs) are facing unprecedented pressure due to persistent late payments. The impact on these smaller firms is significant, with late payments costing UK SMEs an estimated ￡23.4 billion annually, according to the Federation of Small Businesses.?
Responding to these challenges, the UK government has introduced a Fair Payment Code to replace the existing Prompt Payment Code. This new code not only sets higher expectations but enforces a tiered recognition system, rewarding businesses based on their timeliness in paying suppliers. Large companies will also be required to report on their payment practices in their annual reports, holding them accountable to boards, investors, and the public alike.?
While the Fair Payment Code mandates transparency from large firms, tools like PRGX’s Supplier Connect can play a critical role in facilitating compliance, ensuring efficient payment workflows, and supporting the financial health of both suppliers and retailers. By providing features like dispute tracking and real-time invoice visibility, Supplier Connect aligns with the Fair Payment Code’s objectives and makes a practical difference for companies aiming to meet these new standards.?
Current Challenges in Payment Processes?
Late payments continue to pose significant challenges for UK SMEs, creating cash flow issues and impacting their ability to operate sustainably. According to the Department for Business and Trade, administrative errors account for around 24% of delayed payments , making inefficiencies in invoice handling a primary contributor to payment delays.??
For small businesses further down the supply chain, this issue is compounded by every additional layer, leading to increased delays and, often, greater financial strain.?
The government’s new Fair Payment Code aims to mitigate these challenges by holding larger firms accountable to higher standards of payment practices. Through a structured recognition system of Gold, Silver, and Bronze tiers, the code encourages companies to prioritize timely payments — with the Gold standard requiring that 95% of invoices be paid within 30 days .?
For SMEs, timely payments are essential to maintaining financial stability, but delays can often result from simple miscommunication or technical issues rather than intentional practices. The upcoming legislation mandating large companies to report payment practices in their annual reports will push for greater transparency, ultimately helping SMEs hold larger businesses accountable while supporting more predictable cash flows across supply chains.?
How Supplier Connect Bridges the Gap?
For companies aiming to meet the Fair Payment Code’s standards, streamlining processes and maintaining transparency are essential steps toward improved payment practices. Supplier Connect addresses key challenges by simplifying workflows and enhancing visibility for both suppliers and retailers.?
For Suppliers?
Supplier Connect provides SMEs with direct access to essential payment information, enabling them to track the status of invoices and payment timelines independently. This visibility reduces the need for constant follow-up and helps suppliers better manage their cash flow. By being able to identify issues early, such as missing invoices or disputes, suppliers gain greater control over their financial planning.?
The platform also includes tools for tracking disputes, allowing suppliers to monitor their status from initiation through resolution. This organized approach can be beneficial for SMEs seeking clarity and assurance that their cases are actively being managed, while reducing the communication lag often associated with manual processes like emails that often go into a dedicated inbox without dedicated support.?
For Retailers?
For retailers, Supplier Connect helps streamline the complex task of managing supplier relationships and resolving payment-related issues. Centralized dispute tracking improves transparency, supporting compliance with Fair Payment Code requirements. By maintaining organized records, retailers can reduce administrative errors, which are often a primary cause of payment delays.?
Supplier Connect’s reporting tools aid in generating accurate, real-time data for compliance reporting, making it easier for retailers to meet new requirements. By reducing the time spent on data gathering and report preparation, retailers can focus more on strategic tasks, while ensuring alignment with the latest regulatory standards automatically.?
Supporting Compliance with New Legislation?
With the introduction of the Fair Payment Code and recent legislative changes, large UK companies are now under greater pressure to ensure prompt, transparent payment practices. The new code not only encourages timely payments but also mandates reporting in annual statements, offering clear visibility into a company’s payment behavior towards suppliers. This shift in policy is designed to promote accountability and foster stronger supplier relationships by setting clear expectations for fair and efficient payment practices.?
For many businesses, meeting these requirements necessitates robust tracking and reporting systems that can handle the increased demand for detailed data. With features like real-time invoice tracking, dispute management, and automated reporting, platforms such as Supplier Connect align well with these compliance needs. By capturing essential information on disputed invoices and payment timelines, these tools help companies meet the Fair Payment Code’s standards and generate the transparency that both the government and suppliers expect.?
By reducing the chances of administrative errors and consolidating payment information, platforms designed for dispute management can significantly cut down the risk of non-compliance. For companies required to report payment practices biannually, having a reliable system in place minimizes the manual burden on finance teams, ensuring compliance without overextending resources.?
Conclusion?
As the UK government sharpens its focus on fair and transparent payment practices, companies are being called on to improve how they manage supplier relationships and payment timelines. The introduction of the Fair Payment Code marks a decisive step toward greater accountability, with compliance requirements that aim to strengthen cash flow predictability and economic stability for suppliers across the UK.?
Platforms like Supplier Connect enable companies to adapt to these changes by offering organized, real-time visibility into payment processes. With tools to track disputes, automate reporting, and streamline communications, Supplier Connect supports compliance efforts while enhancing operational efficiency and fostering more reliable supplier relationships.?
Visit prgx.com/getconnected to explore how Supplier Connect can help you bring clarity and compliance to your payment practices.
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