SME payment delays fall to record average low of 55 days

SMEs often face liquidity problems due to late payments by bigger clients, says Isme

Mark Fielding of the Irish Small and Medium Enterprises Association: “Big businesses must streamline their payment processes to avoid delays and must not be allowed to insist on lengthy payment timelines.” Photograph: Frank Miller

Mark Fielding of the Irish Small and Medium Enterprises Association: “Big businesses must streamline their payment processes to avoid delays and must not be allowed to insist on lengthy payment timelines.” Photograph: Frank Miller

 

The Irish Small and Medium Enterprises Association (Isme) says many of its members still experience difficulties getting paid by other companies, despite a drop to a record low of 55 days for the average waiting period.

Isme’s credit watch survey for the third quarter showed the average 55-day waiting period for payments is the shortest since the introduction of prompt payments legislation in 2002.

About 16 per cent of SMEs faced delays of three months or more, down from 21 per cent in the previous quarter. Dublin businesses wait the longest on average, with a payments period of 59 days.

The survey also found about 71 per cent of respondents favoured the introduction of a statutory 30-day payments regime.

“Big businesses must streamline their payment processes to avoid delays and must not be allowed to insist on lengthy payment timelines. SMEs often face detrimental liquidity problems due to late payments which is a frustrating and unfair position for them,” said Isme chief executive, Mark Fielding.