You asked, we listened: making the Fair Payment Code easier for every business

Every small business owner I speak to knows the feeling. The work is done and the invoice has gone out and then you wait, while the money you’ve earned sits in another business’s bank account.

At Xero we call late payment what it really is: unapproved debt. For too long, small businesses have been used as a source of free credit by the companies they supply. It’s one of the biggest issues we hear about from customers and from the accountants and bookkeepers who support them. It’s entirely within everyone’s control to fix, which is why we’ve campaigned on this issue for so long.

What’s really refreshing is that we’re hearing from businesses of all shapes and sizes who want to do better when it comes to tracking their payment times and share this openly through the Fair Payment Code. We want to help businesses and their advisors do that. 

Making it easier to do the right thing

To apply for the Fair Payment Code, businesses have to show how quickly they pay their suppliers. Until now, many businesses have been working that out by hand, exporting data into spreadsheets and building their own calculations which takes hours of work. One Xero bookkeeper and Fair Payment Code Gold Awardee told us she had built her own spreadsheets from scratch, then shared them to help friends in the profession.

That’s the kind of generosity the accounting and small business communities are known for. But when this Bookkeeper told us she wished this was easier to do in Xero, we saw an opportunity.

That’s why today we’re launching the Supplier Days to Pay Detail report in Xero, which will be fully rolled out by the end of this week.

In a single view, the report shows how long it took you to pay every bill, from every supplier, over a period you choose. Each bill is categorised by payment time (0–30 days, 31–60 days, 61–90 days and over 90), and you can export the full data. That gives you the payment evidence you need for a Fair Payment Code application, straight from your data in Xero. 

We’ve worked closely with the Office of the Small Business Commissioner while building it, and the Supplier Days to Pay Detail report gives applicants what they need to evidence their payment performance. 

Visibility over payment times is a highly requested feature from our community, for both money going out and money coming in. So the Supplier Days to Pay Detail report is the first of four reports we’re building. Coming soon: a Customer Days to Pay Detail report for the payments coming in from your customers, plus two summary reports giving you average days to pay across both customers and suppliers.

We heard you, and we hope these changes make a real difference.

Libby Walklett, founder of The Ethical Bookkeeper and Fair Payment Code Gold Awardee: “Applying for the Fair Payment Code was a no brainer for me, especially as I see the impact late payments have on my clients every day. I couldn’t find anything to support my application to the Fair Payment Code, so I built my own spreadsheets and manually verified the figures. But it shouldn’t take that much effort to prove you’re doing the right thing, which is why I spoke to the Xero team. I hope the new report means many more businesses, and their advisors, put themselves forward for the Code.”

Why the Fair Payment Code matters

Emma Jones CBE, Small Business Commissioner, said: “Late payment costs small businesses time and money which they could be using to thrive and grow. Xero have been supporters of the Fair Payment Code from day one and now they have taken their commitment to fair payment a step further. We are delighted that as well as being a Fair Payment Code Gold Awardee Xero are supporting their customers to join the Code with new tools to make it as easy as possible. Through the Fair Payment Code you can get the recognition you deserve. Apply today!”

Our latest Xero Small Business Insights data shows that in the June quarter, UK small businesses waited an average of 29.1 days to be paid. On average, they were paid 8.3 days late. Eight days might not sound like much. But when you’re a small business, eight days can decide whether you can pay your staff on time or not. 

The Government’s new Fair Payment Code is one of the biggest steps forward we’ve seen on late payments in a long time. It alone won’t fix the issue, but it helps to create more accountability. 

It recognises businesses that commit to paying their suppliers promptly, and it gives small firms a way to see who they can count on and show that they are great payers too. We believe 30 days should be the standard payment term, no excuses. We’d love to see every business in the UK aiming to be on the Fair Payment Code list. 

We don’t just say this, we are a Gold Awardee on the Code ourselves. We see it as a benchmark to hold ourselves to, and as an invitation to other businesses to look hard at how they treat their suppliers too.

Let’s make paying on time the norm

Better payment culture won’t come from rules alone. It needs every business in the UK  to decide that paying their suppliers promptly is simply how they operate.

So my ask is simple. If you pay your suppliers on time, get the recognition you deserve and apply for the Fair Payment Code. If you’re not there yet, use this report to see where you stand and start closing the gap. 

And if you’re an accountant or bookkeeper, talk to your clients about it. If there’s one group that can move the dial on prompt payment, it’s the accounting and bookkeeping community. You see your clients’ cash flow up close and you know who’s paying on time and who isn’t. You’re the person small businesses trust and listen to, so can help nudge them towards better habits.

Find out how to use the Xero Supplier Days to Pay Detail report for your Fair Payment Code application – link to Xero Central guide