Small firms hit by late payments
Almost half of all small traders doing business in Ireland struggle to get paid in a timely fashion by larger business and state agencies, it was claimed today.
The Irish Small and Medium Enterprises Association published details of a survey which showed that 44 per cent of its members are regularly hit with delays of three months or more in payments.
The group's chief executive Mark Fielding said the Government needed to take urgent action to speed up the payments process.
“Late payments have always been a problem for small businesses and this has intensified as state bodies and accountancy-led big business take longer and longer to pay,” he said.
“When smaller businesses are not being paid on time, they cannot in turn pay their suppliers and the vicious domino effect ends with the smallest and most vulnerable being forced to close down, with the resultant job losses.”
The poll of 770 small firms found they wait 73 days on average for payment from their customers.
This was a slight deterioration from the findings of the last report, during the winter, which showed an average 72 day delay.
Isme wants a mandatory 60 day payment period on all major transactions to be halved to 30 days over the next two years.
It also wants State agencies and local authorities to be forced to pay up within 15 days, with published reports on their performance.
Mr Fielding said delayed payments were deliberate and called for pressure to be brought to bear on big business and state agencies, which he said were the main culprits.
“With the deterioration in late payments across the board, cash flow in the entire small and medium enterprise sector is drying up and this, coupled with the lack of available, affordable credit from the banks, is putting many small businesses at risk, with the resulting threat of closures and job losses,” he added.