ISME Demands Change To Payments Legislation

ISME, the Irish Small & Medium Enterprises Association, has warned that smaller enterprises are being placed under severe pressure by deliberately delayed payments. They say that the Summer SME Credit Watch Survey, released today has shown shows the disastrous predicament in which vulnerable SME businesses are finding themselves, due to lack of normal payments for goods and services.

Three quarters of respondents favoured a mandatory 30 day payment period. (on the assumption that ALL businesses are obliged to pay within 30 days of end of month of invoice. NO EXCEPTIONS), with 13% – ‘Don’t know’. When the “Don’t knows” were excluded a massive 84% were in favour.

The main findings from 700 respondents in the week ending 22nd June are:

-          84% of SMEs favour a statutory 30 day payments regime, with no opt out.

-          Actual average payment period in Ireland for SMEs is 69 days, a slight improvement on the previous quarter at 71 days.

-          38% are experiencing delays of 3 months or more, (Q1, 2012 40%).

-          10% waiting over 120 days, a small improvement on the March figures at 12%.

-          A net 32% of businesses are waiting longer, (Q1, 2012 35%).

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

-          Ulster businesses wait longest, at 78 days, while Dublin remains the best at 66 days.

-          Construction and Distribution businesses wait on average 73 days while Services continue to improve at 66 days.

ISME Chief Executive, Mark Fielding - Insists on new legislation

The Association called on the Minister for Jobs, Enterprise and Innovation to;-          Prioritise the review of the 10 year old Prompt Payments legislation, which should be amended to assist rather than crucify the SME sector.

-          Begin the process of reducing the statutory payment days to 30, as per the ISME proposal.

-          Introduce, publicise and champion a Fair Payment Charter for all businesses.

-          Insist on adherence to Fair Payment Charter as criterion for granting state contracts.

-          Insist that state agencies adhere to the 15 day rule.

-          Insist on publication of payment data as instructed.

-          Government should ‘name and shame’ those who pay SME businesses late.

-          Increase the limits of the Small Claims Court to €20k, from the current paltry €2k.

CEO of ISME, Mark Fielding, said that “The abuse of dominance by large business and state agencies must be stopped and the fact that the banks are refusing normal access to credit for SMEs, means that the indigenous small enterprises are genuinely struggling to survive, despite the fact that they are viable, although vulnerable. The ISME recommendations, which would allow all businesses to predict their cash flow, introduce a level playing field for all credit transactions, reduce reliance on bank finance and bring down the cost of doing business, should be introduced by Government.”

Two Thirds Of SMEs Caught By Scams In The Past Year – Survey

ISME, the Irish Small & Medium Enterprises Association, has warned all businesses to be extremely vigilant, as fraudsters are targeting the enterprise community, attempting to rip off small companies, with a number of scams, including false advance fee contracts, entries into business directories, email phishing, bogus bank account verification and confirmation of “winnings” in international lotteries, being among the favourite scams perpetrated.

The recent ISME Crime Survey 2012 confirmed that 64% of businesses had been the target of a scam in the last twelve months and are being ripped off for thousands of Euro, putting further pressure on businesses already suffering from the economic downturn.

ISME Chief Executive, Mark Fielding confirmed that the Association has received an increased number of calls in the last two months from companies who are being inundated with pseudo-requests, spurious invoices and sham deliveries, in the mail or over the internet. The unsolicited correspondence in relation to non-existent professional guides and Internet directories are proving to be particularly problematic and in the last couple of weeks numerous companies across the country have received invoices from companies seeking payment for entry in an international directory of which the company management was not aware.

“These scams are particularly prevalent during the summer holidays as fraudsters are aware that, in many cases, senior management may be out of the office leaving more junior staff to take decisions. This can result in a staff member signing for goods or services in error, resulting in the company being tied to a spurious contract. Most of these scams concern invoices for subscriptions for, in some cases, non-existent online business directories,” according to Fielding.

Reputable debt collection agencies have been contracted by these fraudsters to collect the ‘debt’, with the resultant cloak of authenticity adding to the hassle, time wasting and interference with normal business. ISME would warn these debt collection companies to be more discerning in choosing their clients.

ISME says also gave out tips as to how to combat this kind of fraud:

1.  All invoices must be checked carefully – especially those coming from abroad or unknown suppliers.

2.  If in doubt about the validity of an invoice, call the company for further details.  All reputable firms will be happy to share this information.

3.  Check the document for small print and read it.

4.  Nominate one or two senior staff who must sign all documentation being sent to third parties in relation to directories and the like.

5.  Ensure that all signatories within the company are fully briefed.

6.  Ensure that all staff understand procedures for signing off on information leaving the establishment.

7.  Never respond to an internet request for information from a bank, DELETE is the only action that should be taken.

8.  Ensure that your business has an appropriate E-mail and Internet Policy for all staff

Small Business Show #31: All Gong and No Dinner

The Small Business ShowConcubhar Ó Liatháin is our guest this week. Concubhar has worked as a journalist and editor, and now he’s running Comharchumann Forbartha Mhúscraí, the local development co-op for the Cork Gaeltacht. Last Sunday he wrote an article for the Sunday Independent highlighting the importance of local initiative and so we invited him to discuss it further on this week’s show.

We talked about the government’s job initiative, or lack of it, and hear the response of Mark Fielding from ISME. And we talked about the role of the internet and technology in education and in business.

The Small Business Show is syndicated weekly on Irish radio stations and podcast each Friday on focusmeireland.com.  You can subscribe for free to download the MP3s automatically using RSS or iTunes.

This podcast is sponsored by mailpak.ie – Custom design, print & mail service

In Focus: The Jobs Plan And The Outlook For 2012

With the announcement on Monday of the governments new jobs plan, there has been mixed reaction all around to the proposals contained within it.

While small businesses welcomed a lot of the positive steps directed at them, there is still a hesitation of endorsement, as the document is vague on how it will achieve some of these proposals.

We talk to Mark Fielding from the Irish Small And Medium Enterprises Association about what the Jobs Plan means to SMEs and the outlook for 2012.