Nearly 60% of Small and Medium Enterprises (SMEs) are unaware of the National Payments Plan (NPP), according to a new survey by Sage Ireland. NPP is a government initiative which aims to make savings of €1 billion a year to the Irish economy by increasing the use of electronic types of payment such as debit cards and electronic banking.
The Sage survey also revealed that some 70% of SMEs are unaware of 'eDay', an initiative to reduce the usage of cheques by September 19, 2014, in spite of the fact the businesses use cheques on at least a monthly basis. Commercial Manager, Sage Ireland, Simon Bell says that SMEs account for 43% of cheque usage in Ireland.
Bell said, “This survey shows an alarmingly low level of awareness about the National Payments Plan. Businesses need to ensure they are prepared for the eDay change and realise that saying the cheque is in the post will no longer work as an excuse for late payment."
Currently, 97% of businesses in Ireland still accept cheques as payment, but 72% of invoices paid by cheque are late, with 25% of payments delayed by more than a month. The most common excuses for delayed payments are 'The cheque is in the post' (29%) and 'I didn't receive that invoice' (27%).
Cheques were also found to cost businesses more time with 19% making deposits in banks daily, and 39% weekly. Over a third of businesses (33%) say that lodging cheques takes an hour or more of staff time. The data from the Sage report estimates that when eDay is implemented and cheques are redundant, businesses will save nearly €5,000 annually by using ePayments, which typically take 24 hours to process.