Irish SMEs call for late payment action as 77% of firms wait two months for payment

The Irish Small & Medium Enterprises Association (ISME) Credit Watch latest survey shows that late payment has deteriorated from 59 days to 61 days in Q2. Dublin and Ulster businesses are waiting the longest to be paid.

Commenting on the results ISME, CEO Neil McDonnell said “Todays’ results are disappointing. Late payments are a big issue for SMEs; it is vital that big businesses, government agencies, and other SMEs pay each other on time” “It is unacceptable for 77% of businesses to experience delays of two months or more. These delays impact cash flow, employment, and investment in businesses. This increase in payment delays is at odds with good business practice; government needs to introduce measures that will help tackle the issue of late payments.”

The main findings from 532 respondents in the last week of July are:

• Average payment period for SMEs in Q2’17 worsens to 61 days.
• 77% of SMEs are experiencing delays of 2 months or more, up from 73% in Q1’17.
• 81% of respondents do not charge interest on late payments,
• 14% are afraid to charge for late payments in case they lose custom.
• 46% of business are waiting longer to be paid, compared to 12 months ago (up from 39% in Q1).
• 21% of Government departments are taking longer to make their payments, up from 17% in Q1′ 17.
• 73% of SMEs favour a statutory 30 day payments regime; with no opt out.
• Distribution is waiting longest on payment at 67 days, while Hospitality waits 40 days.
• Dublin and Ulster businesses wait longest on payment at 63 days and 72 days respectively.
• Businesses in Connaught wait the shortest time at 49 days.

The Association called on the Irish Government to;

• Publicise, promote and champion the Fair Payment Code for all businesses.
• Insist on adherence to Fair Payment Charter as criterion for granting state contracts.
• Insist that all state agencies, including the HSE, adhere to the 15 day rule.
• The office of Government Procurement should require all tenderers to publicise their creditor days.

 

Business on average are waiting 61 days to be paid, this a two day increase on the previous quarter (Q1’17).

Sectorally, businesses in the distribution sector are waiting longest to be paid at 67 days. While those in the hospitality sector are waiting the shortest of time at 40 days. Services and retail are waiting 65 days respectively,  while the construction sector is waiting 63 days, manufacturing is waiting 56 days.

Regionally, Business in Ulster and Dublin are waiting longest to be paid at 72 days and 63 days respectively. Businesses in Munster are waiting 54 days, businesses in Leinster are waiting 52 days, while business in Connaught are waiting the shortest period of time at 49 days