Large firms signed up to the Prompt Payment Code will have to pay small businesses within 30 days as of today (1 July), as new rules came into force.
The Prompt Payment Code announced in January this year states that its signatories have to pay 95% of small businesses within 30 days to crack down on delayed invoices.
The new target cuts payment times to small firms from the 60 days that was originally required.
Under the new requirement, small businesses count as firms with 50 employees or fewer. The target for paying larger businesses will remain 95% of invoices within 60 days.
Chief executives or finance directors of companies signed up to the PPC will also have to make a personal commitment to the new targets by signing the code and acknowledging that suppliers can charge interest on late invoices.
