Small firms 'strangled' by late payments

he Small Firms Association (SFA) has published a new survey that reveals small businesses are being "strangled" by late payments.

Indeed, the organisation said that the average payment in Ireland takes 62 days to reach its intended target, leaving many firms without any available cash.

Furthermore, 57 per cent of small firms are offering credit terms of 30 days or less because of it, while 68 per cent of businesses experience late payments on their own credit terms.

Patricia Callan, Director of SFA, said that amendments need to be made to the late payment process in the country.

"Significant efforts must be made to change the late payment culture through the introduction of a Voluntary Private Sector Prompt Payment Charter; the extension of the voluntary 15-day payment period to all Government Agencies including the HSE; and the introduction of a cost-effective enforcement mechanism through the extension of the remit of the Small Claims Court for business debts up to €5,000," she explained.

It comes after SFA said earlier this month that small businesses can create up to 20,000 jobs in the next 12 months.

Posted by Emily Smith

Date published 18 Feb 2013 | Last updated 9 Jan 2013