71% of businesses experience delays of 2 months or more.
The ISME Credit Watch Survey for the fourth quarter of 2016, was published today 19th December. Credit days have decreased from 61 days to 59. The Association welcomes this decrease but highlights the need for Government and big businesses to do more to ensure SMEs are paid on time.
Commenting on the results ISME, CEO Neil McDonnell said “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 retard growth”
“71% of companies surveyed are waiting 60 days or longer for payment, this is totally unacceptable. SMEs are the Irish economy with 99.8% active enterprise. They must be guaranteed greater statutory protection from late payments”
“The most recent European Payment Report aligns with our Credit Watch Survey in finding that late payments are an obstacle for job creation”.
The main findings from 844 respondents in the first week of December are:
Average payment period for SMEs in Q4’16 has improved by 2 days to 59.
71% of SMEs are experiencing delays of 2 months or more, down from 74% in Q3, 2016.
Late interest is charged by only 3% of SMEs.
13% are afraid to charge for late payments in case they lose custom.
22% of big businesses are taking longer to make their payments.
84% of SMEs favour a statutory 30 day payments regime; with no opt out.
Wholesale is waiting 68 days, while Hospitality waits 42 days.
Munster businesses wait longest on payment at 62 days.
The Association called on the Government to;
Prioritise the mandatory introduction of Prompt Payments legislation.
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.
“2017 present 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” concluded McDonnell.