Signed, Sealed, Unpaid: Getting Real Traction From the Prompt Payment Code

The Prompt Payment Code is one of the few visible signals a UK supplier can point to when a customer's payment behaviour falls short of what was promised. It appears on corporate websites, in bid documents and in the footer of purchase orders. It is frequently invoked in credit-control correspondence as though it carried the weight of statute.

It does not. Understanding precisely what a signature commits a business to — and, just as importantly, where that commitment stops — is what turns the Code from a decorative badge into usable leverage.

What a signatory actually promises

Businesses that sign the Code undertake, in broad terms, to:

• pay 95% of invoices within 60 days, and to aim for payment within 30 days wherever possible;
• treat 30 days as the standard payment term, with longer terms used only where properly agreed;
• maintain a clear and fair process for resolving disputes, and not to withhold payment of undisputed sums while a query is worked through;
• refrain from using late payment of smaller suppliers as a way of managing their own cash position;
• provide a named point of contact for payment queries;
• publish payment performance data where the Reporting on Payment Practices and Performance Regulations 2017 require it.

The Code is administered on the government's behalf by the Chartered Institute of Credit Management, and a Code Compliance Board considers complaints about signatories that appear not to be honouring those commitments. That Board is the enforcement story most suppliers have in mind. It is a much thinner story than it sounds.

Four places where the commitment is narrower than assumed

Sixty days is a ceiling, not a target. A signatory can pay on day 59, every time, and remain technically within the headline metric, provided 95% of invoices land inside 60 days. The remaining 5% can be slow indeed. A business paying consistently at day 55 is compliant and still a serious cash-flow problem for a small supplier.

The signature belongs to a legal entity, not to a brand. Group structures matter enormously here. A parent company's signatory status does not automatically extend to its subsidiaries, and a trading subsidiary's signature does not bind its parent. Where the invoice is addressed to one entity and the Code claim comes from another, you are relying on goodwill rather than a commitment.

Your contract survives the Code. If the purchase order specifies 90 days end of month, signing the Code does not rewrite that term. There is a fair question about whether imposing such terms sits comfortably with the commitment made, and that question is worth raising — but your remedy still lies in the contract, not in the Code.

The ultimate sanction is removal. The Code Compliance Board can investigate and can recommend that a business be removed from the list of signatories. It cannot order payment, award interest or compel a remittance date. Removal is a reputational consequence that lands hardest on businesses with public-sector or large corporate customers, and it arrives slowly.

Verifying that the claim stands up

Before citing the Code in correspondence, spend ten minutes confirming the position. Check the official signatory list by the exact legal entity name and, where possible, the company number — not by trading name alone. Look for any published record of suspension or removal, since claims sometimes outlive the status that supported them. Then cross-check the entity against the government's payment practices database, which will show median days to pay, the proportion of invoices paid late and the proportion paid beyond 60 days; that data often tells a more candid story than the logo.

Record what you find, with the date. A short file note reading "signatory status verified on the register on [date]; median time to pay reported as [X] days" is far more persuasive in a later escalation than an assertion that the customer is "a signatory".

Where the customer is a public-sector contractor, there is a second strand to pull. Central government departments are expected to pay 80% of undisputed invoices within five days and all of them within 30, and prompt payment obligations flow down the supply chain through framework and procurement terms. A Code claim made by a tier-one contractor is therefore reinforced by contractual conditions — and that combination carries more weight than the Code alone.

Building it into an escalation ladder

The Code works best as a middle rung. A sensible sequence runs as follows.

1. Invoice-level reminder. Reference the signatory commitment briefly and factually, alongside the invoice number, due date and a copy of the invoice.
2. Letter to the named Code contact. The Code requires a point of contact for payment queries; use it, and copy the account handler.
3. Escalation to the finance director or chief financial officer. Attach an evidence pack and state plainly that the delay appears inconsistent with the business's published commitment.
4. Formal complaint to the Code Compliance Board. The Board will expect to see that you have made reasonable attempts to resolve the matter directly, so this step should follow the earlier ones rather than replace them.
5. Statutory remedies. Interest and fixed compensation under the Late Payment of Commercial Debts (Interest) Act 1998 remain available regardless of the Code, and the Small Business Commissioner can assist in certain disputes with larger businesses.
6. Commercial and legal review. Consider credit insurance, retention of title, suspension of supply or recovery action.

The evidence pack that makes any complaint credible

Keep contemporaneous records: the contract and terms, the purchase order, the invoice and its due date, proof of delivery or acceptance, a dated log of every chase and every response, remittance advices or the absence of them, and extracts from the payer's published payment practices report. Assemble this once, in one place, and update it as matters progress. Suppliers who can produce a clean chronology in an afternoon tend to get paid faster than those reconstructing events from memory.

Where the limits begin

Be candid with yourself about what pressure the Code can exert. It will not create a right to interest. It will not override a contractual term you agreed. It will not make a reluctant treasury department move. Used as a bluff, it damages your credibility the first time a customer checks — and larger customers do check.

What it does provide is a documented, publicly verifiable standard against which a payer's conduct can be measured, and a formal channel through which that conduct can be examined. That is worth having. It is simply not the same as a remedy.