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Late payments hitting small firms

This article is from page 64 of the 2005-08-23 edition of The Clare People. OCR mistakes are to be expected so download the original SWF or the rendered page 64 JPG

THE ENNIS Chamber of Commerce has called for laws to make big business pay interest to small concerns on unpaid bills in a climate in which small firms are being crippled by late payments.

ISME, the independent business organisation said this week that small businesses are being squeezed to death by the failure of creditors to pay their bills on time.

According to a survey carried out by ISME, one-third of small companies are waiting long- er for payments than they did this time last year

and the distribution sector faces the biggest problem, with 41 per cent of those companies waiting longer now than they did last year.

While legislation exists to deal with prompt payments, Mark Fielding, Chief Executive of ISME, said that the laws are “not worth the pa- per they are written on. The evidence suggests that small companies are still being forced, particularly by accountancy-led big business to accept credit terms longer than those outlined in the legislation.”

CEO of the Ennis Chamber, Rita McInerney, said that the Chamber’s view on the Prompt Payments Legislation is that it is “a positive fa-

cility for business as it’s objective is to stimulate erowth and development. However, indigenous small businesses in Ireland are under increas- ing pressure, as they are operating in a country that has seen consistent rising costs while ex- pected to compete with the foreign stores and products.”

Ms McInerney said that while competition is healthy, mechanisms should be in place to en- courage domestic enterprises.

“It should be made easier for small businesses to implement the good intention of the Prompt Payments Legislation. It is time to rectify the situation where larger businesses can dictate

credit terms to small businesses while these smaller enterprises have to wait for payment and pay promptly themselves.

“When a government department or agency is late with a payment, they are obliged when settling an account to pay interest to their sup- plier on the overdue amount – private compa- nies should be made to adhere to these same conditions,’ the CAE said.

ISME is now calling on the government to amend the prompt payments legislation and in- troduce a mandatory level of 30 days for credit terms from the 53-day term which currently exists.

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