Credit days have increased to 61 days on average, the highest in almost two years.
86% of SMEs favour a statutory 30 day payments regime with no opt out.
24% of SMEs are experiencing delays of 3 months or more.
The ISME Credit Watch Survey for the third quarter of 2016, was launched today 28th October. Credit days have increased from 57 days to 61, an increase of four days. The Association expresses its concern at this increase, highlighting the negative impact payment delays can have on liquidity and working capital.
ISME Chief Executive Neil McDonnell commenting on the results stated, “It is disappointing to see payments delays increase by four days; to the highest in almost two years. These delays have serious consequences for businesses, particularly micro and small medium enterprises. Delays in payment especially by state agencies and big businesses are totally unacceptable. More needs to be done by this Government with regards prompt payments. The voluntary code launched by the Government in March 2015 is simply not working. Evidence of its failure was highlighted most recently in a tender published by the Department of Jobs in July which had a low-take up in numbers. This situation, coupled with the lack of available and affordable credit from the bailed out banks, is slowing the recovery of many small
The main findings from 764 respondents in the first week of October are:
Average payment period for SMEs in Q3’16 has deteriorated by 4 days to 61.
24% of SMEs are experiencing delays of 3 months or more, up from 17% in Q2, 2016.
5% waiting 120 days and over, an increase from 3% in Q2.
Late interest is charged by only 3% of SMEs.
18% are afraid to charge for late payments in case they lose custom.
34% of big businesses are taking longer to make their payments.
86% of SMEs favour a statutory 30 day payments regime; with no opt out.
Wholesale is waiting 69 days, while Hospitality waits 38.
Dublin and Ulster businesses wait longest at 62 days.
The Association called on the new administration 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.
“Late payments are having a regressive effect on SMEs. Excessive business costs, access to finance and late payments are undermining the SME sector. SMEs do not have the luxury of awaiting late payments. This Government needs to introduce a mandatory 30 day payment period,” concluded McDonnell