This information will be made publicly available and theoretically act as a deterrent to those that think they might be able to get away with late payment, which harms suppliers.

While a step in the right direction, this process falls short of what is needed.

In the context of late payment large organisations are held up as the primary culprits, but in fact late payment is rife throughout the supply chain and smaller businesses are just as culpable, although they tend to pass the blame up the supply chain by excusing their behaviour on account of them not being paid by their customer(s).

The exact nature of what will have to be reported on and the corresponding metrics to be used have yet to be fully clarified although this form released almost a year ago could give some indication.

What is going wrong and why?

The important question remains one of context, i.e. ‘why are customers paying their bills late?’

Firstly, any company required to report on its own late payment is essentially carrying out a counter beneficial action and is unlikely to do so with a spring in its step.

Secondly, intentional malfeasance is not always the cause of late payment. Admin and bureaucracy are equally to blame.

While large organisations will be required to clarify the extent of their late payment, there is less likely to be any focus on why payment was made late and therefore little or no distinction between intentional and unintentional late payment.

The reality behind this second point helps nobody. Suppliers need to understand if they are going to do business with a company that pays late and they need to know if the reasons reflect an institutionalised mindset or an administrative overburden or any number of other possibilities.

Asking the customer why they pay late is unlikely to yield anything useful but asking a supplier what reasons they have been given by a late paying customer is more likely to surface useful context.

Suppliers hold the key to progress

Therefore it is now down to the suppliers to make the running. It is suppliers that can deliver culture change by anonymously sharing information on payment practices. It’s no different to rating a hotel.

Knowing if a potential customer will pay late and the likely explanations behind it will help both suppliers and customers reach contractual arrangements that enable them to continue to do business while reducing the risk of late payment.

For suppliers it means greater confidence and security in doing business; for customers that practice good corporate governance it means they will not be unfairly labelled as the bad guy.

The big picture is simple, suppliers must also play their part in helping to encourage and foster a culture of prompt payment.

Hugh Gage is Founder and Managing Director of The Prompt Payment Directory.