Duty of Care
Reporting for duty, sir
If you’ve had your fingers in your ears hoping the new duty to report on how well you pay suppliers would just go away quietly, now’s the time to get to grips with the new reporting requirements. The Reporting on Payment Practices and Performance Regulations 2017 came into force on 1 April 2017 and the first submissions will be due on 31 October 2017.
The regulations are an attempt to tackle the problem of late payment because the information will be made public, meaning the worst offenders can be named and shamed. But first things first. Let’s find out if you’re affected by the legislation…
Do you have a Duty to Report?
As always, there are exceptions to the rules, but here are the basic criteria.
Is your business a company or LLP incorporated in the UK under the relevant legislation?
If your answer is yes, move to the next question.
If your answer is no, your business has no requirement to report under Duty to Report - yet. However, it might be worth considering the benefits of reporting voluntarily – read on to find out what these are.
Is your business in its first year of operation?
If your answer is no, move to the next question.
If your answer is yes, your business has no requirement to report under Duty to Report yet because only businesses in their second or subsequent years of operation are affected by the regulations.
At the end of your last two financial years did your business exceed two or more of the following criteria?
- £36m turnover
- £18m balance sheet total
- 250 employees
If your answer is yes, move to the next question.
If your answer is no, your business has no requirement to report under Duty to Report yet.
Here’s what you need to know if you have a Duty to Report
When you have to report
You are required to report twice a year. The first reporting date is six calendar months after the first day of your financial year. So if your financial year starts on 1 January, your first reporting period ends on 30 June and your second ends on 31 December. In each case, you have 30 calendar days to make your submission.
Where you have to report
Each submission is made via the gov.uk website.
What you have to report
You need to report a mixture of narrative and statistical information. One of our customers, top 100 law firm Stevens & Bolton LLP, has created a quick cheat sheet that features a list of the reporting requirements.
Tell me one good thing about Duty to Report
If your systems and processes are in good shape and you pay your suppliers on time, Duty to Report is a great opportunity. It’s a way to show potential customers and suppliers you’re a good business to do business with.
If you know you could be doing better, Duty to Report is your wake up call to get your house in order or risk a tarnished reputation (and a fine).
And bear in mind that the best document management software and systems give you two things:
- The ability to put in place efficient processes that help you to pay suppliers on time
- The ability to get the statistics you need for reporting requirements like these at the touch of a button.
Meaning Duty to Report becomes a valuable PR opportunity – not another administrative headache you could really do without.
With thanks to Oliver Kidd, Senior Associate at top 100 law firm Stevens & Bolton LLP for summarising the facts for us. You can see the information contained in this article in flowchart format.
And if you would like to understand more about Duty to Report, you might like this discussion between Concur regional director Steve Roberts and journalist Tom Herbert of AccountingWEB.
