28pc of SMEs are waiting over 90 days to get payment
Published 30/06/2014 | 02:30
MORE than a quarter of small businesses are having to wait three months or more to be paid by suppliers, it has been claimed.
The average payment period for SMEs has deteriorated to 63 days from 60, according to lobby group the Irish Small and Medium Enterprises Association (ISME).
The vast majority of small businesses are calling for a mandatory 30-day payment.
ISME chief Mark Fielding said the Government's claims to be SME focused aren't true, despite late payments laws currently in place.
"They allow big business and government agencies to continue to abuse their dominant position to contract out of the legislation," he said.
"The figures prove it. The average credit period prior to legislation was 52 days; today it has deteriorated to 63 days."
ISME also pointed out that only 2.5pc of SMEs feel that they can charge interest on late payments as they feel threatened by larger businesses amid fears that they will stop dealing with them.
The findings come from a survey of 826 businesses which was carried out by ISME.
Key findings include:
* 28pc are experiencing delays of three months or more, a deterioration on the 25pc in the first three months of the year.
* 6pc are waiting over 120 days, up from 5pc in the first quarter.
* Late interest is charged by less than 2pc of micro and small businesses, while 8pc of medium sized businesses charge it.
* Munster businesses wait longest, at 66 days, while Connacht is best at 51.
* 84pc of SMEs favour a statutory 30-day payments regime, with no opt out.
ISME has called for the introduction of a statutory 30-day payments regime for all business trading within Ireland with other Irish based enterprises, without exception.
And it said there needed to be a Fair Payment Charter for all businesses and that this charter would be insisted upon when state contracts where being awarded.
"The ISME recommendations for a 30-day mandatory payment would allow all businesses to predict their cash flow, introduce a level playing field for all credit transactions, reduce reliance on bank finance and bring down the cost of doing business," Mr Fielding said.