Business and Enterprise Minister Michael Fallon unveiled the new Prompt Payment Code (PPC) that ensures timely payments to small and medium enterprises.
The ministered urged the companies to abide by the regulations or face penal action.
The measures undertaken by the government are part of its efforts to improve cash flow for small and medium-sized businesses reeling under the much-delayed payment schedules of big corporate.
Some suppliers have had to wait up to 180 days before payments were disbursed, reported The Telegraph.
Retail major Sainsbury’s was earlier found guilty of delaying payments to its food suppliers for 75 days but has since rectified the scenario.
Promising to abide by the proposed code Sainsbury’s released a statement that said, "We already abide by the spirit of the code and will be responding in the coming weeks."
Retailer Morrisons also pledged to conform to the new norms but highlighted that the existing regime with the company ensured payments to suppliers within a mutually agreed timeline.