The Irish Small and Medium Enterprises Association (ISME) Credit Watch survey for the first quarter of 2015 has found that credit days for SMEs have increased from 60 to 62 days on average.
The survey also found that 23% of SMEs are experiencing delays of 3 months, while 3% are waiting over 120 days for payments. Only 2% of small companies and 3% of medium companies surveyed charge interest on late payments.
It found that 75% of SMEs have their credit terms dictated to them by larger businesses, rather than defining their own in deals.
The survey also shows that average waiting times are not equal across Ireland; with Munster businesses seeing delays of up to 64 days and Connaught businesses seeing delays of 50 days on average – 20 days more than the current Prompt Payments legislation asks for.
The ISME has slammed the Prompt Payments legislation as ineffective, claiming it has made the situation worse for small businesses by allowing bigger businesses to use contracts to ignore it.
“The 30 days mentioned in the legislation is now a sick joke while our government allow ineffectual prompt payments legislation to continue to strange small business,” said ISME Chief Executive Mark Fielding.
ISME is calling on the Minister for Jobs, Enterprise and Innovation to strengthen the current legislation and ensure a statutory 30 credit days be enforced, while holding state agencies to payments within 15 days.
© 2015 - Checkout Magazine by Jenny Whelan.