Department of Business, Enterprise and Innovation: Prompt Payment Code

DBEI Gov of IRL Guidelines Logo

Organisation Type: Department of Business, Enterprise and Innovation

Location: Dublin, Carlow, Kilkenny, Cork, Sligo

Mission Statement:
‘We will lead on the creation and maintenance of high quality and sustainable full employment across all regions of the country by championing enterprise and innovation across government, by supporting a competitive business base to incentivise work, enterprise, trade, innovation and investment and by promoting fair and competitive markets as well as best business practice through the regulatory and enforcement work of the Department, its offices and its agencies.’

No. of Employees: 910

Overview of CSR Initiative


Title: Prompt Payment Code

Prompt Patment Code Logo

Background:
A Prompt Payment Code (PPC), was introduced in 2013 and aimed at improving cash flow for businesses and ultimately, driving a change in Ireland's payment culture. Government is leading by example and has ensured that all Government Departments, their Agencies and Public-Sector Bodies sign up to the Code.

The PPC has been developed by business for business and it is therefore vital that it is supported by business. Organisations can play their part by signing up to the Code through the online portal www.promptpayment.ie.

Signatories to the Code undertake to
• Pay suppliers on time within the terms agreed at the outset of the contract, or in accordance with legislation.
• Give clear guidance to suppliers by providing them with clear and easily accessible guidance on payment procedures.
• Ensure there is a system in place for dealing with complaints and disputes which is communicated to suppliers.
• Advise suppliers promptly if there is any reason why an invoice will not be paid to the agreed terms.
• Encourage good practice by requesting that lead suppliers encourage adoption of the Code through their own supply chains.

As the 15-day prompt payment rule is a voluntary practice no penalty applies in cases where payments are made outside of the 15-day administrative period and within the 30-day statutory period. The 15-day prompt payment rule only applies to transactions between business and Government Departments/Public Service bodies and does not apply to business-to-business contracts where contractual arrangements continue to determine payment periods and be subject to late payment interest legislation.


Project team:
Stakeholders involved in the development of the PPC, included the Small Firms Association (SFA), Irish SME Association (ISME), Irish Business and Employers Confederation (IBEC), Chambers Ireland, the Irish Institute of Credit Management, Intrum Justitia and the Banking Payments Federation Ireland, supported by the Department of Business, Enterprise and Innovation.

Resources required:
Time commitment from employees in the Department and the stakeholders for their input in developing the Code, promoting it among the business community and in the provision of feedback. The PPC portal was updated and redesigned to make the online sign-up process more streamlined and user friendly and to make the PPC site more informative.

Challenges:
Getting paid on time is an ongoing issue for anyone in business, especially if your business is a small one. Late payment can cause cash flow problems, requiring firms to extend overdraft facilities and in some cases can even lead to insolvency and bankruptcy. The Prompt Payment Code has been put in place to protect businesses against late payment and bad debts.

To be successful the Code needs buy-in and meaningful input from the businesses themselves and the various business representative bodies.

Benefits:
The Prompt Payment Code aims to drive Ireland towards a culture of prompt payment. The online portal and Code provides comprehensive information for businesses on the area of prompt payment. By signing up to the code, companies agree to pay on time and give clear guidance to suppliers on payment procedures.

Outcome:
The three primary objectives of the Code are to encourage and promote best practice between businesses and their supplier, to improve cash flow between businesses and to drive a change in payment culture.

How was/is this initiative promoted? e.g. Annual Report, Linkedin etc.
A standalone website site www.promptpayment.ie was developed and the initiative was promoted through various stakeholders involved in the process. The Department also promotes the code at relevant events such as the annual Taking Care of Business event which helps small and start-up businesses understand and benefit from the services provided by many of our State offices and agencies.

Do you report on CSR in the Annual Report?
Under review.


CSR Dimension

Towards Responsible Business’ Ireland’s National Plan on CSR 2017-2020 identifies 4 core dimensions of CSR – Environment, Community, Workplace and Marketplace.

• Environment - minimising negative environmental impacts
• Community - interaction with your local community partners and organisations
• Workplace - supporting and engaging with your employees
• Marketplace - interaction with your local community partners and organisations.

Please select the dimension(s) that you apply to your CSR Initiative and why?


Marketplace Dimension
This initiative is included under the Marketplace Dimension as it
• encourages and promotes best practice between businesses and their supplier,
• improves cash flow between businesses,
• drives a change in payment culture.


Organisation Impact

How has the CSR initiative benefitted your organisation and demonstrated a win:win in the short-term and/or long-term?

The benefits of signing up to the Prompt Payment Code are

• It enhances the business reputation which makes it more attractive to suppliers,
• A culture of prompt payment promotes cash flow in both directions – paying suppliers on time and the business itself gets paid on time,
• Costly late payment interest fees and compensation costs are avoided.

Sustainable Development Goals (SDGs)


Please identify which SDG goal(s) apply to your CSR initiative.


SDG 8 – Decent Work and Economic Growth
This initiative is included under Goal 8 as it was aimed at improving cash flow for businesses and change in Ireland's payment culture which in turn supports Economic Growth.

Learning


What did you learn from your experience of creating and implementing a CSR initiative?
It is vital to have buy in from the various stakeholders for the implementation of any CSR initiative. It is vital to keep in mind the potential audience when considering how to communicate a CSR initiative. This ensures that the initiative can be understood and have demonstrable practical benefits for the intended recipients.

What advice would you give a Public-Sector body starting on their CSR Journey?
Ensure that your CSR Strategy is aligned with your Business Strategy. Consult with your management team and stakeholders across a wide range of functions for their feedback, input and buy in. Identify the relevant resources available to you externally and engage with industry experts and representative groups to get their advice and guidance.

Download a copy of the Case Study as a pdf.

Case Study provided by
Department of Business, Enterprise and Innovation
March 2019