Wouldn’t it be great to know whether large businesses paid on time

As part of our Ask the Expert series, Karen Savage, Partner at law firm Shoosmiths, takes a look at the draft regulations for large companies to report their payment practices.

The regulations

With effect from 6 April 2017, draft regulations (Reporting on Payment Practices and Performance Regulations, 2017) would have large companies and LLPs publishing information about their payment practices and performance twice a year via a government website so that you can see who pays their bills on time. You will be a large company for these regulations if you tick two of the following three criteria: annual turnover of over £36 million; balance sheet total of over £18 million or over 250 employees.

Everyone will benefit from these regulations because you can see who does what, but if you tick two of the following three criteria: annual turnover of over £36 million; balance sheet total of over £18 million or over 250 employees, then you’ll need to be one of the ones who submits their data.

The reporting will include information about your payment terms, including your standard contractual length of time for payment of invoices, maximum contractual payment period and any changes to standard payment terms and whether suppliers have been notified or consulted about any such changes. You will also need to give information about your dispute resolution process related to payments.

Statistics will also feature in the report, and you will need to provide the average time taken to pay an invoice from the date of receipt of the invoice. This will include the percentage of invoices paid within the reporting period which were paid in 30 days or fewer, between 31 and 60 days, and lastly over 60 days. You will also need to confirm the proportion of invoices due within the reporting period which were not paid within the agreed terms.

There are a number of statements within the reporting requirements about whether you offer e-invoicing, supply chain finance and whether you are a member of a payment code. For example, the prompt payment code. You will need to state whether your practices and policies cover deducting sums from payments as a charge for remaining on a supplier’s list, and whether you have done this within the reporting period.

The report will need to be signed off by a director and so the intention is that this will be an issue at board level, and will therefore be a prominent consideration for those affected.

Guidance is expected at the same time as the regulations are placed before Parliament, and readers are welcome to monitor our publications for further updates.


The aim of these regulations is to enable suppliers to identify which of their customers subject to the regulations are good payers. It will also provide information about payment terms and conditions which will allow suppliers to assess how their customers trade with their suppliers, and presumably whether they wish to offer their goods or services to that company.

Broadly, this is intended to be a tool for small business to tackle late payment, but there can be many reasons for late payment. The companies affected by these regulations will need to consider how they identify the risks from these regulations and manage those within their business, and in communications with suppliers. It may be, for example, that potential partners rule themselves out from a trading relationship with you before you even get the chance to dialogue with them.

Disputed invoices will be included within the statistics which record the proportion of invoices which were not paid within the agreed terms, and within the statistics on the average time taken to pay. This aspect might well need close examination within your business, and what impact if any, disputed invoices could have on your supplier base.

For those suppliers recovering unpaid invoices, this new regime will provide information which might assist with that debt recovery process. Depending on where the company is on the cycle of reporting, current information about their payment profile might assist you with your decision making in relation to debt recovery options.

About Karen Savage

Karen is a Partner and leads the recoveries team at Shoosmiths, a makor UK law firm. Karen has over twokarensavage decades experience in commercial recoveries and insolvency litigation, having acted for a broad range of clients within the financial sector, utilities, debt purchase , trade creditor and credit insurance sector.

Karen is recognised and ranked by Legal 500 and Chambers and known for her commerical and pragmatic advice, together with her exceptional client care skills. Karen is also a previous winner of Credit Todays Litigation Specialist of the Year

Disclaimer – This document is for informational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given.

Release notes – February 2017



February has been a busy month here at Ormsby Street, following the major release for CreditFocus at the end of January.  We’ve listened to the feedback and have made a few immediate updates to the service to address what seemed the most pressing.  The remaining feedback has made its way into our backlog for future release.

New features

  • Company page print
  • VAT receipt print
  • Direct Debit prompt for Bank Charge customers


  • Payment score history graph
  • Specific businesses not appearing in business search
  • Specific businesses not loading
  • Watchlist paging
  • IE11 Solicitors Letters double submission


If you have feedback on the CreditFocus service then do get in touch with us at support@creditfocus.co.uk and let us know your thoughts.  It could be an issue you’ve identified or a great idea for how we can support you more.



A slightly quieter time was had with CreditHQ, where we’ve introduced a couple of new features aimed at highlighting key features, as well as offering an incentive to upgrade.


  • Watchlist suggested businesses
  • Free trial on upgrade


  • Invitation resend


If you have feedback on the CreditHQ service then do get in touch with us at support@credithq.co.uk and let us know your thoughts.  It could be an issue you’ve identified or a great idea for how we can support you more.

Note: These release notes summarise the key releases undertaken during the period.  A series of smaller or more technical releases have also taken place.

How to optimise profit through effective credit management

As part of our Ask The Expert series, fellow of the Chartered Institute of Credit Management, Steve Savva looks at the effects of optimising profit through effective credit management.

How to optimise profit through effective credit management

It takes an average of 72 days to settle an invoice owed to SME’s in the UK.

Financing a single £1,000 debt at 8% per annum* for 72 days would cost almost £16; that’s before you even begin to take into consideration bad debts or administration costs.

Yet many companies simply do not bother to train the people who are instrumental in getting cash in.  Targets, incentives, rewards and training should be as welcome in Credit as they are in Sales!

Collecting money is an important part of the overall business.  Timely collections ensure good cash flow, minimise the need for bank borrowing, lessen the possibility of crippling bad debts and maximise profits.

What should you consider?

  • Your terms of sale are there to be enforced.
  • The policy you set will determine the effect needed.
  • Credit-check your customers regularly.
  • You should never be embarrassed to ask for your money.
  • If you promise to do something, do it!
  • Efficient, effective systems and communication channels at the time of sale ensure fewer problems at the back end.
  • A dedicated collections person ensures better use of knowledge, quicker reaction to adverse signs and continuity for customers.

Why might you have credit risk concerns?

  • You may assess a risk incorrectly.
  • You fail to notice warning signs of a customer’s decline.
  • Because companies can be crippled by outside events; the collapse of a major company in a market sector can cause many smaller businesses in the same industry to fail.
  • Management doesn’t plan for impending business downturn or interest rate increases.
  • Cash flow suffers before you figure out what’s wrong.

What should you do?

  • Follow up on all overdue accounts. Be persistent.
  • Find out what the real problem is, how it will be resolved, when you can expect payment and so on.
  • Maintain goodwill, empathise, but don’t get sympathetic to their problems.
  • Collecting money is a selling job, so talk about the benefits of paying rather than the consequences of non-payment.
  • Watch the big ones. Don’t think because someone spends thousands of pounds with you that they cannot become a problem.
  • Ask for the money. All too often one has heard conversations about the weather, business levels, held orders, but never a request for payment.
  • Set the tone. A little friendly conversation puts them at ease and preserves goodwill, but get to the point.
  • Leave yourself an escape route. If you lose your temper you lose control.  Stay courteous, but in command.  Be assertive not aggressive.
  • Provide Customer Satisfaction at a Profit and collect the money.

About Steve Savva (FCICM)

stevesavvaSteve has been involved in credit management since leaving school and was a founding Board Member of the Association of Credit Professionals, who he served as Chairman and President.  He is a Fellow of the Chartered Institute of Credit Management, where he served as Chairman of the East Midlands Branch.

Steve has been developing and presenting training courses for a number of years with his own company, Credit Management Training Ltd

Your exclusive offer

Get 40% off the cost a CMT training course by using the voucher code ccp-mcc-197 on checkout. Courses include Best Practice in Cash Collection by Phone and Managing Commercial Credit Risk.  Book now at a venue near you.

average cost of Bank Borrowing for businesses, including hidden costs for loans, overdrafts and charges etc.

Favourite Business blog: Hao Chii – Chinese and Indian fusion popup

This week, one of our senior software developers,  Faesel Saeed, reveals his favourite small business and it’s making us rather hungry! Enjoy!…


Hao Chii is the literal translation for delicious (and their food is not far from it), in Mandarin. Fusing two of the best cuisines known to software developers, Indian and Chinese, the results are marvellous and will leave you with an extra waist size by the end of the month.

I first discovered Hao Chii by total chance; I was actually looking for a post office and happened to stumble upon their bright yellow and black bumblebee looking food van. Their style of catering is a lot like Subway’s where you get to customise your food – pot based on the options available. After one or two visits you start discovering your killer combination, and are hooked for life.

As a true start-up, Hao Chii have fully embraced technology allowing you to pre-order your food, so you can stop doing what we brits do best(!) and cut out the queue. They’ve also embraced social media and have a strong presence online.

Having gone there for the past year, I found it interesting to see them evolve their food pots after criticism that the previous ones were hard to eat out of. Especially if you’re not a chopstick man/woman! It’s great to see a place that takes feedback from its customers and quickly acts on it.

The guys at Hao Chii regularly do events in and around London, so if you see them be sure to check them out. The prices are reasonable and the service is quick, so it’s a good option for people on the go.

My Hao Chii combination:

Tangy Tango Chicken with Egg Fried Rice (which chilli sauce obviously!) and a side of spring rolls. See picture below for a succulent reference.

https://www.facebook.com/HaoChiiLondonhttps://twitter.com/haochii_london,  http://haochii.com/

Check out our other ‘My Favourite Business’ blogs here: Martin’s blog,  Carolyn’s blogRob’s blog