Government must clamp down on slow payments - Isme
The Government must prioritise the mandatory introduction of prompt payments legislation to ensure small and medium firms get paid on time, business group Isme has said.
Small Irish companies now wait 59 days on average for payment, down two days from the third quarter of the year, according to Isme's Credit Watch Survey.
However, nearly three-quarters of SMEs are waiting on payments for two months or more, a problem Isme chief executive Neil McDonnell said needed to be addressed.
"The reduction of two days on late payments is a step in the right direction, but a 59-day average wait is still too high. Late payments effect the economic viability of an enterprise and retards growth," he said.
Mr McDonnell said it was "totally unacceptable" some businesses had to wait more than 60 days.
"SMEs are the Irish economy. They must be guaranteed greater statutory protection from late payments."
Under 5pc of small companies here charge late fees, with 13pc afraid to charge it for fear of losing customers.
Isme surveyed 884 firms in the first week of December and found 22pc of big businesses were taking longer to make their payments.
Almost 85pc of businesses favour a statutory 30-day payment regime that offers no opt-out.
According to the research the wholesale industry has the longest wait period, with 68 days on average. Hospitality comes in at 42 days.
Munster is the worst affected region for delayed payments, with an average wait time of 62 days.
"2017 presents a new opportunity for the Government to change the cultural credit environment, this administration needs to introduce a 30-day credit regime across all trading sectors in Ireland," Mr McDonnell said.
The association called on the Government to promote the Fair Payment Code for all business and insist on its adherence as criterion for granting State contracts.
Isme also said all State agencies should adhere to a 15-day rule and that Government procurement should require all tenderers to publicise their creditor days.
After the publication of the CSO's inflation figures earlier in the month the business group said the country's cost of living needed to be addressed.
Bank interest, legal fees, and insurance costs all need to be tackled in the new year according to the body. It said reducing Government-influenced costs would act as a more viable option to increasing public sector pay.