Late Payments Sending Businesses ‘To The Wall’ – ISME

ISME, the Irish Small & Medium Enterprises Association has warned that more businesses are in danger of ‘going to the wall’ because of protracted and late payments from big business and State agencies. The Spring SME Credit Watch Survey, released today clearly shows the disastrous predicament that vulnerable SME businesses are finding themselves due to lack of normal payments for goods and services.

 The main findings from 610 respondents in the week ending 23rd March are:

-          Actual average payment period in Ireland for SMEs is 71 days, similar to the previous quarter.

-          40% are experiencing delays of 3 months or more, similar to Q4, 2011.

-          12% waiting over 120 days, a small improvement on the December figures at 14%.

-          A net 35% of businesses are waiting longer, an increase from the 31% in Q4 2011.

-          Both big business and state agencies continue to increase the credit taken.

-          Ulster businesses wait longest to be paid at 79 days, while Dublin remains the best at 68 days.

-          Construction businesses wait on average 77 days while Services have improved to 67 days.

 Commenting on the situation, ISME Chief Executive, Mark Fielding stated, “The challenges for small and medium businesses in accessing finance are being exacerbated by late payments from big business and state agencies. While this fact has been acknowledged by Government in its Action Plan for Jobs, scant action has been proposed and once more the SME sector is ‘thrown to the wolves’. While the ISME proposal to introduce a Fair Payments Charter is helpful, it must be championed and driven by the Government, otherwise accountancy led big business will simply ignore it”.