60 days is the ceiling. Don’t make it your standard.
Daily FinTech Signal — Founder Reaction
I welcome the reform. I don’t accept the number.
Confirming a 60-day maximum is real progress after years of drift, and the enforceable interest and reporting duties give it teeth. But a maximum is not a standard, and too many finance leaders are about to make the same mistake — reading “we pay inside 60 days” as a pass mark. It isn’t. It’s the bare minimum the law will now tolerate.
Sixty days is a starting position — the government said so. Ministers chose 60 as a cautious opening, not a destination, and reserved the right to take it to 45. Read that plainly: the state already regards 60 as too slow and expects to tighten it. If the regulator sees 60 as a way-station, no operator should be treating it as an achievement.
The real risk is that the ceiling becomes the floor. The government’s own response flagged it — firms currently paying faster may drift up towards 60 to sit safely under the cap and avoid penalty exposure. That is the perverse outcome: a reform meant to speed payment up quietly slowing it down for the businesses that were already paying well. I would rather this reform dragged my worst supplier terms upward than watch it pull my best ones down towards the legal limit.
So here is the standard I would actually hold. Pay your suppliers in 30 days as a matter of operating discipline, not compliance. It is not charity — it buys priority, loyalty and better pricing from the people you depend on, and it is the cheapest goodwill a growing business can generate. Then chase your own receivables to a sub-45 norm, and treat any customer sitting at the full 60 as a cash-flow risk to manage, not a term to accept. Your DSO target should embarrass the legislation, not match it.
The wider point. Legislation sets the floor of acceptable behaviour. It does not set your standard — you do. The businesses that come out of this ahead will not be the ones that scraped under 60. They will be the ones paying and being paid faster than the law requires, treating “we’re compliant” as the least interesting thing they can say about their cash.
Sixty days is what the state will now permit. It is not what a well-run business should tolerate — from itself, or from anyone it invoices.
