Delayed payments harming Irish firms - study

The strong economy is masking poor debt management by Irish businesses, according to a study by credit management services company Intrum Justitia.

Worsening late payment trends are putting companies at a significantly higher risk of suffering cash-flow problems, the firm said.

The time it takes Irish companies to receive payments is now almost double that in other European countries, where average payment times have improved, according to the results of the European payment index survey.

The average length of time in which Irish companies receive payments has increased to 52 days, up from 51 days last year.

The level of bad debts written off by Irish businesses is 71 per cent higher than the best performing countries, the index shows.

The number of invoices outstanding for more than 90 days has almost doubled in the past year. The average payment delay in 2006 - the time after the agreed payment date - was just over 14 days.

Intrum Justitia managing director Nick Biggam said in serious cases, the later average payments would put companies in danger of bankruptcy.

The survey reinforces the Republic's position as one of the worst late payers in Europe.

"If not addressed, this will be detrimental to the future profitable growth of many Irish businesses, particularly in the SME sector."

More companies are beginning to tackle the problem, he added.