BAE Systems and Shell suspended from Prompt Payment Code

21 February 2020

BAE Systems and Shell are among eleven firms to be suspended from the Prompt Payment Code for failing to pay suppliers on time.

The Chartered Institute of Credit Management (CICM), which administers the code on behalf of the UK government, said the companies had failed a commitment to pay 95% of all supplier invoices within 60 days.

Signatories to the code pledge to uphold its best practice for payment standards to end the culture of late payment.

The CICM said the 11 companies failed to engage within a set deadline, while Shell UK and Bottomline Technologies also failed to submit action plans towards achieving compliance.

The other nine were BAE Systems (Military Air) Overseas, BAE Systems (Operations), Cereform, FM Conway, Leonardo MW, Macdonald Humfrey (Automation), Rhodar, Sita Information Networking, Computing UK and Smiths Detection.

The CICM also said 14 businesses had been reinstated to the code, including British Sugar, Balfour Beatty Group, Laing O’Rourke, Fujitsu Services and Vodafone.

CICM chief executive Philip King, who chairs the code’s Compliance Board and is interim small business commissioner, said: “All 14 businesses have demonstrated a substantial improvement in payment performance that warrants reinstatement to the code.

“Since the policy was changed in 2019 to begin naming those who had failed to honour their code commitments, 55 businesses have been suspended and 26 re-instated, including the 14 announced today.”

Meanwhile a study of invoices by Market Finance has found that 43% of UK invoices sent abroad were paid after the typically agreed 45-day payment terms from completion of work or delivery of goods.

US companies were named as worst late payers, taking 96 days to pay. Half (53%) of US invoices, with an average value of £40,115, were paid late.

China was second worst, taking 56 days to settle invoices, unchanged from the previous year.

More than eight in 10 (84%) of Chinese companies paid late, and the average value of late invoices was £37,176.  

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