Late Payment Directive Can Help Cash-Flow For Smes – Prendergast

Labour MEP Phil Prendergast has called for the speedy implementation of an
EU directive covering late payments to businesses, following new figures
showing the average waiting time for settling invoices in Ireland is 71
days.

According to ISME’s Spring Credit Watch Survey, the waiting time in
Munster is 75 days in the private sector.

Ms Prendergast said: “Businesses are facing enough problems accessing
credit and maintaining cash flow without having to waste time chasing
cheques. Implementing the Late Payment Directive would help address this
problem.

The directive entitles businesses in certain circumstances to charge a
penal interest rate if they have to wait more than 30 days for payment and
they can also charge a minimum recovery cost of €40. This would be a
significant deterrent to late payment of invoices.

The Directive creates particular responsibilities for public authorities
to pay within 30 days, though certain types of public body can have a
maximum of 60 days to pay.

“This directive came into force on the 15th of March last year but does
not have to be put into effect until March next year. I understand
drafting of the Irish legislation for transposing directive has not begun
yet.

The Government has introduced a wide range of business supports since it
came into office, so I’m surprised that implementing this directive was
not one of those actions.

I’m also amazed that, according to ISME, public bodies are still holding
up payments to their suppliers. At a time of crisis for Irish business,
public bodies must recognise their responsibilities.

We hear, time and time again, of viable SMEs going to the wall because of
non-payment or late payment. Simply settling bills on time is a practical,
no-cost way of supporting the small businesses that are the life-blood of
the Irish economy.