A state-led scheme to stop late payments has relaunched after getting hardly any sign-ups
In two years, just 42 companies signed the government’s ‘prompt payment code’.
THE GOVERNMENT HAS relaunched a charter that encourages businesses to pay suppliers on time after only a handful of firms signed up to it in almost two years.
The ‘prompt payment code’ (PPC) was rolled out in May 2015, but so far just 42 private and semi-state companies have signed it to promise punctual payment to their suppliers.
There is a total 178 signatories listed on the campaign’s website, but the vast majority of them are government departments or agencies.
Among the private companies listed are packaging giant Smurfit Kappa, credit check firm Stubbs Gazette and drinks behemoth Diageo.
The PPC website, which includes tips and advice for firms with cash-flow problems, was redesigned to become more user-friendly and make it easier for companies to sign the code.
Firms that sign the voluntary charter promise to provide suppliers with a clear guide on payment procedures; ensure there is a system in place for dealing with complaints; and give suppliers notice if they can’t pay an invoice at an agreed time.
The code was developed by the main business representative bodies – ISME, the Small Firms Association (SFA), Chambers Ireland and Ibec.
Relaunching the PPC website and campaign, Minister of State for Employment and Small Business Pat Breen said cash-flow certainty “can mean the difference between staying in business and going under” for companies, especially those in the SME sector.
“Few things can threaten the survival of a small business more than late payment,” he said. “It can affect its ability to pay bills, salaries and other operating expenses.”
Minister of State for Small Business Pat Breen
‘Never ending problem’
SFA assistant director Linda Barry described delayed payments as “a never-ending problem for small business”.
“Our surveys show that cash-flow management is consistently among the top risks identified by small businesses in Ireland,” she said.
According to SFA, it takes on average up to 62 days for small firms to get paid, even though the majority of contracts offer credit terms of a month.
“This culture of late payments makes it difficult to pay staff and suppliers, it requires firms to extend overdraft facilities and consumes a great deal of management time,” she said. “This makes it extremely challenging to run a successful business.”
Barry said the relaunch of the PPC website and code was “a marker in the sand” to say that late payments are a thing of the past.
