ISME, The Irish SME Association today published the results of its quarterly Credit Watch Survey Q3’18. Based on the findings, credit days for this quarter have worsened from 55 to 59 days. Businesses in Ulster are waiting the longest to be paid at 70 days followed by Leinster at 58 days. The Manufacturing and Construction sectors are waiting longest on payment; an average of 63 and 69 days respectively. The Association emphasises the importance of businesses paying each other on time.
Commenting on the results ISME, CEO Neil McDonnell said:
“Today’s report showing an increase in payment delays is disappointing. Cash flow certainty is a key feature of sustainable businesses. Failure by businesses to pay each other on time has a knock-on effect on productivity, development, and growth.”
The ISME CEO added:
“There needs to be a collective change in our attitude when it comes to paying creditors. Businesses in the Wholesale sector are waiting up to 78 days, which is completely unacceptable.
Smaller businesses do not have working capital to wait for payment as long as big businesses. 36% of multinationals are taking longer to make their payments, showing a total disregard for SMEs.”
These findings represent 12% of our membership, with research undertaken in the last week of September. The main results show:
- Average payment period for SMEs in Q3’18 worsens from 55 to 59 days.
- 69% of SMEs are experiencing delays of 2 months or more, up from 67% in Q2’18.
- 85% of respondents do not charge interest on late payments,
- 14% are afraid to charge for late payments in case they lose custom, an increase of 3% Q2’18.
- 36% of multinationals are taking longer to make their payments.
- 70% of SMEs favour a statutory 30 day payments regime; with no opt-out.
- Wholesale and Construction sectors are waiting longest on payment, at 78 and 64 days respectively.
- Businesses in Ulster on average are waiting 70 days to be paid.
- Businesses in Dublin are waiting on average 53 days on payment.
- Businesses in Leinster are waiting on average 58 days on payment.
- Businesses in Connaught are waiting the shortest time on payment at 43 days, while Munster is waiting on average 53 days.
The Association called on Government to:
- Actively publicise, promote, and champion the Fair Payment Code for all businesses.
- Insist on adherence to Fair Payment Charter as a criterion for granting state contracts.
- Insist that all state agencies adhere to the 15-day rule.
- The office of Government Procurement should require all tenderers to publicise their creditor days.
View the full report: here