86% of SMEs favour a statutory 30 day payments regime; with no opt out.
Big Business slipping back into old ways.
Lack of Government intervention putting business and jobs at risk.
The ISME Credit Watch Survey for the second quarter of 2016, was launched today (4TH July), showing a small improvement in payment days to 57 days, two days better than previous quarter. The Association warned that late payments are continuing to cause liquidity issues for some SMEs and demanded that the new administration prioritise this issue.
ISME Chief Executive Mark Fielding commented, "It is essential that all businesses and in particular small business be in a position to predict their cash flow with some degree certainty. However, because of the abusive dominance of big business, cash flow across the SME sector is slow. This market failure is allowed to happen because of the complete lack of government intervention. This situation, coupled with the lack of available and affordable credit from the bailed out banks, is slowing the recovery of many small businesses.
The main findings from 901 respondents in the final week of June are:
Average payment period for SMEs in the first quarter of 2016 has improved by 2 days to 57.
17% of SMEs are experiencing delays of 3 months or more, down from 24% in Q1, 2016.
3% waiting 120 days and over, a reduction from 4% in Q1.
Late interest is charged by only 4% of SMEs.
Dublin businesses wait longest, at 57 days, with the rest of Leinster best at 51 days.
Distribution is waiting an average of 68 days, while Hospitality wait 50.
86% of SMEs favour a statutory 30 day payments regime; with no opt out, similar to Q1.
The Association called on the new administration to;
Prioritise the review of the Prompt Payments legislation, which should be amended to assist rather than crucify the SME sector.
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.
Insist on publication of all payment data as instructed.
Government should 'name and shame' those who pay SME businesses late.
"Late payments are not only damaging to SMEs but are highly inefficient from a macroeconomic perspective, increasing costs, reducing investment and job creation. Its impact on smaller business can be life-threatening and result in closures. The new Government must review the legislation which is aiding and abetting slow paying larger business to the detriment of SMEs across the country," concluded Fielding.