SFA welcomes late payments developments
Friday, March 12th, 2010The Small Firms Association (SFA) has welcomed the publication by An Tánaiste of figures showing that central government departments are making progress at implementing the decision of Government last May to pay their bills to small businesses within 15 days.
However, the Association warned of the limited impact which this measure is having on improving cashflow to small businesses overall, due to the fact that the decision has not been extended thus far to state agencies and local authorities.
“Public Procurement contracts are estimated to be worth €15bn annually, yet in the figures for the 2 quarters monitored and published, the total amount paid out is just €2.8billion,” Director, Patricia Callan commented.
Callan added: “Late payments in Ireland are worsening and are compounding an already difficult financial environment for many small firms. The state as the biggest purchaser in the country has a key role to play is solving this problem. It is appalling that the HSE, in its terms and conditions, has set out a payment period of 45 days, in direct contravention to commitments given by An Taoiseach and An Tánaiste that all central government departments will pay their bills within 15 days and all other state bodies and local authorities will pay within 30 days.”
Callan concluded: “Late payment is a self-perpetuating problem. When a firm receives late payment, the companies merely shift the problem on to their own suppliers. One of the key difficulties is enforcement of rights under the Late Payment in Commercial Transactions Regulations, 2002. If a company wishes to purse a claim, it is difficult to do so as there is no Small Claims Court for businesses and there are no simplified legal procedures. Small companies have problems gaining access to Court due to administrative backlogs, the lengthy delays in setting up Court dates and the relevant costs. What is required is the urgent establishment of a Small Claims Court for business to business transactions, to make it feasible for small companies themselves to pursue outstanding debts, without going through lengthy and costly civil court proceedings.”
