Group calls for measures to change late payment culture
The Small Firms Association – a division of business representative organisation Ibec - has called for a voluntary private sector prompt payment charter and other measures to change the late payment culture.
It also wants the extension of the voluntary 15-day payment period to all Government Agencies including the HSE and the introduction of a cost-effective enforcement mechanism through the extension of the remit of the Small Claims Court for business debts up to €5,000.
The SFA yesterday published the findings of its “Late Payment Survey”, which showed that 57 per cent of small firms offer credit terms of 30 days or less and 68 per cent of companies experience late payments on their credit terms. It also found that on average firms waited 62 days to be paid but despite this almost three quarters of firms surveyed do not apply an interest penalty as allowed under law.
A new EU Directive is due to be transposed into Irish law in March 2013. “However, this will have a negligible impact on combating late payments here as only the interest rate will change in real terms,”according to Patricia Callan director of the SFA. “Therefore, prior to the new directive being implemented it is essential that an information campaign is conducted to increase awareness of the legislation . . .”