During the first six months of 2019, Balfour Beatty took an average of 40 days to pay its invoices, compared to 50 days in the previous six-month period.
Balfour Beatty says that over the past 18 months it has consistently improved its UK payment statistics. “The percentage of invoices paid within 60 days, including disputed invoices, for the first six months of 2019 was 86%, up from 82% for the last six months of 2018 and 77% for the first six months of 2018,” it says.
Balfour Beatty was one of 12 businesses suspended from the Prompt Payment Code in April, along with Costain, Engie Services, Interserve Construction, Kellogg Brown & Root, Laing O’Rourke and Persimmon Homes. Galliford Try, Alun Griffiths, Severfield and Ferrovial Agroman were suspended in July. The suspensions are subject to delivering on promises to make good. Costain was readmitted after demonstrating that it was now up to scratch. John Sisk & Son was thrown out altogether for non-compliance.
Balfour Beatty is hoping that it will soon be able to rejoin the fold, having had its action plan to achieve compliance accepted by the PPC.
But, all this good progress could be scuppered, Balfour Beatty warns, by the impending change to VAT rules, which is expected to throw everything into chaos.
“Whilst Balfour Beatty remains focused on measures which ensure continued improvement in its payment performance, it operates in a sector where supply chains and contractual terms are complex, and prompt payment is often materially impacted by resolution of disputes and alignment to agreed contractual processes.
“From 1st October 2019 the UK government's new VAT domestic reverse charge regulations come into effect, which may impact the ability of the group's supply chain to accurately invoice Balfour Beatty.”