The time taken by the UK’s biggest companies to pay their smaller suppliers has been an issue for small and medium sized enterprises (SMEs) in Britain, and the Government has picked up on this. The Department for Business, Energy & Industrial Strategy (BEIS) estimates that as of June 2015 over £26bn of late payments were owed to SMEs in the UK.
Major companies’ payment practices are in the media spotlight and now, under the Payment Practices and Performance Regulations, all large UK companies are required to publish specific information on their payment practices and performance.
In addition to the reputational risk associated with this data becoming publically available, all directors have a criminal liability if found that their company has submitted false or misleading payment reporting. Many are also concerned by the tight deadlines - within 30 days of the year end/half year – and potential cash flow implications if changes are made.
Get in touch to find out more, or click on one of the links for further information.
Read our blogRead the latest Capital Agenda blog, Time to pay? which analyses the data submitted.
Watch our webcastHear about the emerging sector trends from the 1000+ payment reports published and the lessons learned.
(Recorded June 2018)
Watch our webcastA first look at published reports and our updated regulatory guidance webcast.
(Recorded December 2017)
Read our publicationPayment Practices and Performance Regulations: Is your business ready?
How EY can help
Responding to the Regulations can impact your reputation, working capital and supplier relationships. Our team can give you confidence in your reporting numbers and can help you protect your business. We have helped our clients with a range of services on this topic – from help simply getting started, helping them pull together their draft reporting (including calculations, exclusions, narrative statements and drafting an assumptions document for your signing directors), or simply reviewing and providing confidence on their reporting.
- Getting started
Raising awareness of reporting
We will plan and run a workshop which includes:
- a) raising awareness of the reporting requirements across your team
- b) working with key team members to agree responsibilities and prioritise actions.
- Findings and recommendations
Findings and recommendations report
We will work with the key personnel involved in your reporting (such as Accounts Payable, Legal teams, Procurement, Finance) to walk through your current processes to provide feedback on improvement areas.
We can also review your draft data to analyse and highlight outlier information, and will share our insights from working with other clients.
Advisory support when you need it
We can share our insights and experience on a call off basis. We agree a contract for a set amount of time and provide you with support, from how others are interpreting the requirements and how this could apply to your specific situation.
Utilising our analytics tool, we will create a first draft of your reporting and work with you to refine the details. The size of the project depends on the number of entities and source systems.
There are three main steps to this work:
- 1. Kick-off workshop to agree responsibility and actions
- 2. Downloading your data to create an initial draft set of data
- 3. Refining the data
- Benchmarking and comparison
Testing collection processes and narrative disclosures
Focusing on areas which are considered more challenging, we will undertake procedures agreed with you to test data collection processes and narrative disclosures.
We will help you benchmark your draft data against peers and published data.
Giving you confidence in your reporting
We will give you confidence in the accuracy and completeness of the quantitative and/or qualitative information being collated.
We will continuously provide feedback, with the aim of improving processes.
Our report can be addressed to management or the audit committee. If required we can also provide an assurance statement for internal or external use. We follow the Limited Assurance criteria of ISAE3000.
- Managed Service
EY can help you create the reporting required based on the latest guidance from the regulator and assumptions agreed with management. This is done through EY’s analytics suite allowing clients to benefit from additional insights into their payment processes and potential working capital opportunities.
Automation of reporting
To ease the burden on your finance function, EY’s analytics suite can be used to automate the report creation based on agreed rulesets. This allows you to focus on the value add activities whilst relieving the administrative strain on your finance function at the busiest times of the year.
EY can build bespoke analytics that can integrate the payment reporting into the day to day operations of your business. This can be either built fully in your IT environment or EY hosted. These solutions can transform the performance of payment functions whilst bringing broader data driven insight from across the procure to pay cycle.
If you would like any further information about any of the issues covered here, please contact us.
1. Sources: “New research from The Peterson Institute for International Economics and EY reveals significant correlation between women in corporate leadership and profitability.” EY website, https://www.ey.com/US/en/Newsroom/News-releases/news-ey-new-research-from-the-peterson-institute-for-international-economics-and-ey-reveals-significant-correlation-between-women-in-corporate-leadership-and-profitability, accessed on 8 February 2016.
2. Sources: Women Matter: A corporate Performance Driver, McKinsey & Company, 2007; Global Gender Gap Report 2014, World Economic Forum.
3. Sources: Scaling up: why women-owned businesses can recharge the global economy, EYGM Ltd, 2009; Global Gender Gap Report 2014, World Economic Forum.
4. Sources: “When Women Rule, Nations Prosper,” Columbia Business School website, http://www8.gsb.columbia.edu/articles/node/1633, accessed on 6 January 2015; Global Gender Gap Report 2014, World Economic Forum.
5. Sources: The Credit Suisse Gender 3000: Women in Senior Management, Credit Suisse Research Institute, August 2012; Global Gender Gap Report 2014, World Economic Forum.