Belfast Telegraph

Late payments hit small businesses

State agencies have been accused of delaying payments to small businesses which rely on their cashflow to stay open.

ISME, the Irish Small and Medium Enterprises association, has demanded that Government put its money where its mouth is when it comes to commercial payments.

Mark Fielding, chief executive, claimed state agencies, and in particular the HSE, are ignoring the instructions by Enterprise Minister Richard Bruton to pay all invoices within 15 days - leaving small businesses short of promised payments with which to pay their own suppliers.

He maintained some hospitals are blatantly abusing their position by demanding even longer payment dates.

"These government agencies and accountancy driven big businesses are terrorising smaller suppliers with their 'take it or leave it' demands," said Mr Fielding.

"This amounts to an interest free loan, which SMEs are obliged to give to their much larger and economically stronger customers.

"The result of this is that the smaller businesses are closing down, not due to lack of profits, but lack of cash, as the state-rescued banks are not lending to cover the shortfall in cash flow."

The Association called on the Minister to insist state agencies adhere to the 15 day rule, on publication of payment data as instructed and name and shame those who pay SME businesses late.

It said a survey of 626 small businesses found the average period for a payment in Ireland was 71 days - with 40% waiting more than three months

Mr Fielding added: "With late payments across the board, cash flow in the entire sector is drying up and this, coupled with the lack of available and affordable credit from the rescued banks, is putting many small businesses at risk, with the resulting threat of closures and job losses."


From Belfast Telegraph