Three jurisdictions, one direction
Late Payment Regulation
The Commission's 2023 proposal replaces the Late Payment Directive with a regulation capping business to business payment terms at 30 days, with limited room to extend, and makes interest and compensation automatic rather than at the supplier's option. Still in negotiation, and the direction of travel has not changed through it.
Fair Payment Code
Replaced the Prompt Payment Code in 2025 with gold, silver and bronze tiers tied to how fast signatories actually pay, alongside statutory payment practice reporting for large companies. The code is voluntary. The reporting is not, and the government has said it will look at going further.
Payment Times Reporting
Large businesses report how fast they pay small suppliers twice a year. The 2024 reforms gave the regulator power to name slow payers and require them to publish their record, and state security of payment laws cap construction terms at 15 to 25 business days.
Australia has two live examples of the same thing at a smaller scale: Payday Super moved superannuation from quarterly to every pay run, and Victoria's Security of Payment reforms capped construction payment at 20 business days. Both fix a date that used to flex.
None of these is about whether you pay. All of them are about when. Each moves payment timing from a term you negotiate to a number you are measured against, and the measurement is public.
What a finance team loses
For most large buyers, supplier payment timing is the one large outflow that flexes. Tax is fixed by legislation. Payroll is fixed by contract. Debt service is fixed by the facility. Supplier payments were where a treasurer could find ten days at a quarter end, by stretching terms, slowing a run or leaning on a supply chain finance programme to make the stretch palatable.
A business with $600 million of annual supplier spend on 60 day terms holds roughly $100 million of payables at any time. Moving to a 30 day cap halves that. The $50 million has to come from somewhere: a facility, a working capital programme, or a change in how the remaining payments are funded.
The usual response is a supply chain finance programme: the supplier is paid early by a funder, the buyer pays the funder on the original long terms. A programme that pays the supplier early satisfies a timing rule. What it does not do is hide the stretch: since 2024 supplier finance arrangements are disclosed in the notes to the accounts, so the buyer's extended terms are visible to anyone reading them. The rule is met. The exposure is the disclosure.
Two levers, one of them closing
There have only ever been two things a buyer can change about a supplier payment. When the cash leaves, and how it is funded.
When cash leaves
Terms, payment runs, early settlement discounts, supply chain finance. This is the lever regulation is reaching for. Where a cap applies it is no longer a lever at all. Where reporting applies, using it has a public cost.
How the payment is funded
Bank transfer from your own cash, a drawn facility, or card rails where your commercial card programme funds the payment and your cash leaves on the statement date. The supplier is paid on the regulated date. Your cash position is a separate question. No regulation above touches this.
The point regulators have made for us. A rule that says "pay the supplier within 30 days" is silent on how. A supplier paid on day 30 by bank transfer, funded by a card the buyer settles on day 75, is paid on time under every regime above. The timing lever closes. The method lever does not.
What this means in practice
- Stop planning around terms you may not keep. If your market is heading for a cap, a working capital plan built on 90 day terms has a shelf life.
- Treat method as a treasury decision, not an AP setting. How large outflows are funded has been left to habit because timing did the work. When timing is fixed, method is where the days are.
- Check what your supply chain finance programme actually reports. If the rule measures when the supplier is paid, a programme that pays them early helps. If it also measures or discloses when you pay, it may not.
- Separate the supplier's date from yours. That separation is the whole working capital opportunity left once terms are regulated, and it does not require the supplier to change anything.
If your terms are already inside the caps and you do not use them as a lever, none of this changes anything for you. The pressure lands on buyers whose working capital plan depends on terms longer than a regulator is prepared to allow.
Our view is that this trend does not reverse. Late payment to small suppliers is politically easy to legislate against and commercially hard to defend. Buyers who have relied on timing will find the lever shortening in every market they operate in, and the ones who move first to managing method will hold a working capital position the others have to give up.
Flow: the supplier is paid on the date. Your cash leaves on the statement.
Card-funded settlement with GlobalFinex B2B as the merchant. The supplier receives a bank transfer and a remittance advice on the regulated date. Nothing about their terms or your compliance changes.
Sources: European Commission, Proposal for a Regulation on combating late payment in commercial transactions, September 2023. UK Office of the Small Business Commissioner, Fair Payment Code, 2025. Australian Treasury, Payment Times Reporting Act 2020 and 2024 amendments. IFRS Foundation, Supplier Finance Arrangements, amendments to IAS 7 and IFRS 7, effective 1 January 2024. Worked figures are illustrative.