Tuesday 25 July 2017

ISME: Payment delays still hurting

Small business group ISME has said that smaller enterprises continue to suffer due to 'deliberately delayed' payments from both state agencies and larger businesses.

It said that although the number of credit days has reduced and enterprises are waiting less than reported in the last three quarters, the delays are still excessive and are creating cash flow difficulties for small businesses.



ISME says that average payment period in Ireland for SMEs is 72 days, a slight improvement from 73 days in the autumn survey. It added that 43pc of firms are experiencing delays of 3 months or more.



According to ISME chief Mark Fielding, “The evidence suggests that small companies are still being forced, particularly by accountancy led big businesses, to accept credit terms outside those outlined in the legislation.



"The law does the exact opposite to what was intended, in allowing powerful large customers to abuse their dominant position and dictate unreasonable credit terms to their smaller suppliers.



"Despite persistent warnings from the Association, the current government refuses to tackle this issue as smaller businesses go to the wall and jobs are lost because of totally inadequate legislation and a minister asleep on duty.”



“Cash flow is the lifeblood of any small business and it is imperative to have a realistic and adequate cash flow for the day-to-day running of the firm.



"If small business has to pay within 30 days but is forced to give 90 and in some cases 120 and more days credit to the financially more powerful big business and state organisations, then this acts, not just as a constraint on growth but as a threat to the very existence of many small businesses and is the ‘Achilles heel’ of the SME sector.”

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