Long awaited mechanisms for improving prompt payments to businesses are being tackled according to Minister for Small Businesses, John Perry, TD.
According to the Minister, the Introduction of a Code of Conduct on Prompt Payments is an important step towards improving cash flow between businesses.
The area around late payments, from businesses and also government bodies, has been on the agenda of many organisations that speak for small enterprises.
The new Code of Conduct on Prompt Payments is to be published to help address the culture of late payments in Ireland and aims at improving cash flow between businesses. The Code of Conduct is being developed by the Business Representative Bodies in Ireland with the support of the Department of Jobs, Enterprise and Innovation.
According to Minister Perry, “Small and Medium Sized-businesses are at the core of the government’s plan for jobs and growth.” According to his department SMEs employ over 650,000 people and contribute 10 billion EUR in taxes to the Exchequer every year. “They are the backbone of the economy. However, the economic crisis has presented significant challenges across enterprises in Ireland, but for SMEs in particular the issue of late payments is of critical concern,” says Perry.
It should be noted that this is just a Code of Conduct that interested parties are signing up to. Minister Perry and his department are of the opinion that the introduction of a Code of Conduct on Prompt Payments, which is part of the government’s drive to get credit flowing in the Irish economy and part of Action Plan for Jobs 2013, will hopefully encouraging prompt payment for all business transactions.
Minister Perry also said: “I believe the publication of a Code of Conduct on Prompt Payments combined with the recent implementation of the Late Payment Directive and the 15 day prompt payment arrangement for the Public Sector, will represent significant progress on the issue of prompt payments in Ireland in 2013.”
Also commenting on the Code, Mark Fielding, Chief Executive Officer, Irish Small and Medium Enterprises Association ISME, who as part of the group of Business Representative Bodies tasked with the development of the Code, said: “This is an extremely important initiative between government and business. We look forward to all businesses, large and small, leading by example in subscribing to the Code, on what’s an extremely important issue for Irish SMEs."
Earlier in July ISME welcomed what they described as a “slight improvement” in commercial payments in the second quarter of the year, at the launch of the SME Credit Watch Survey.
Speaking at the survey launch, Fielding stated: “The results of this latest ISME Credit Watch Survey are somewhat encouraging and the Code of Conduct should have a positive effect on cash flow for SMEs. However, the fact that IBEC have refused to be involved in this Code initiative is a challenge to government as big businesses are the main culprits in late payments. Government must therefore bypass IBEC and exert pressure on the multinationals, large businesses and state agencies through the IDA and Enterprise Ireland.”
“ISME challenges IBEC to demonstrate its willingness to be part of the revival of the economy by signing up for and embracing the new Code of Conduct on Prompt Payments. It may be a belated chance for them to don a real green jersey and discard the tattered, torn and faux version worn during the duration of the ‘partnership fiasco’,” concluded Fielding.
Responding to the challenge, a representative for IBEC told The Epoch Times that their organisation has “done a significant amount of work on the issue of late payment in recent years, leading to the current introduction of late payment legislation, the aim of which is to significantly reduce payment times. We have also indicated to government that we are happy to engage with our members on the practical impact of any new code.”
