Seven in ten SMEs experience two-month payment delays
ISME is calling on the Government to introduce ‘prompt payment’ legislation
Businesses in the construction sector had to wait 76 days to be paid, the longest sectoral waiting time. Photograph: iStock Photo
Seven out of ten small or medium sized enterprises (SMEs) experience delays of two months or more to receive payments, according to the Irish Small and Medium Enterprises Association (ISME).
The ISME credit watch survey for the first quarter of 2017 shows that the average payment period for SMEs was 59 days, which was unchanged on the previous quarter.
Regionally, businesses in Dublin wait the longest to be paid, while businesses in Connaught had to wait the shortest period and, on average, received payment within 45 days.
“Today’s results are no better than the previous quarter and are disappointing. Paying on time is vital for the economic viability of any business,” said ISME chief executive Neil McDonnell.
Businesses in the construction sector had to wait 76 days to be paid, the longest sectoral waiting time, according to the survey. Hospitality and wholesale businesses had to wait the shortest amount of time, waiting 30 and 48 days respectively.
The findings from the 764 respondents in the last week of March also show that 13 per cent of SMEs are afraid to charge for late payments in case they lose custom while 83 per cent favour a statutory 30 day payment regime.
Commenting on that finding, Mr McDonnell added: “We need a change in attitudes to late payments in Ireland. We cannot accept 70 per cent of businesses experiencing a delay of two months or more in receiving payment.”
The organisation is calling on the Government to prioritise the introduction of prompt payment legislation.