REPORTING LEGISLATION IS MORE THAN A TICK BOX EXERCISE

Under new Government legislation that came into force in April 2017, large companies are now required to report on their payment practices, policies and performance every six months. While compliance is mandatory, there are commercial incentives available to those businesses that treat the new Government legislation as more than just a tick-box exercise, writes Colin Darch, Business Process Consultant at Open ECX.

The new duty to report makes a whole host of large companies' payment-related information publically available for the first time.

With just the click of a button, visitors to a new Government website will be able to access the latest statistics relating to such information as the average time taken for a business to pay an invoice from the date of receipt, the percentage of invoices paid in 30 days or fewer and the proportion of invoices which were not paid within agreed terms.

The new legislation has been designed to give small business suppliers better information so they can make informed decisions about who to trade with, negotiate fairer terms, and challenge late payments.

As such, simply going through the motions to comply with the reporting requirements could leave large businesses open to long-term reputational damage and leave the small businesses that supply them questioning if they want to do business with them in the future, through fear of non- or late-payment. But there are commercial advantages open to the exemplar companies; those that see the value in good payment behaviour and champion a ‘fair payment' ethos.

Businesses that actively work to improve and maintain their payment performance, through the implementation of e-Invoicing software, for example, can use their results as a powerful marketing tool; helping to differentiate themselves from poorly-performing competitors, and also demonstrate that they are committed to supporting their supply chain.

Those that don't risk their competitors attracting the best suppliers.

Open ECX facilitates automated electronic transactions across a large community of construction businesses and suppliers. Open ECX's scalable software helps streamline and better manage. procure-to-pay (P2P) processes, whether they be receiving e-Invoices, viewing e-Catalogues, placing e-Orders or paying subcontractors.

Software from Open ECX dramatically enhances visibility, control and compliance while also allowing substantial cost-savings and improved trading relationships in the Construction Supply Chain. Visit - http://openecx.co.uk/