Ireland worst hit by late payments

A new report shows that over 50% of Irish companies believe late payments pose a threat to their survival, and that the culture is hitting Ireland harder than its EU peers.

The study — by leading international credit managment services firm Intrum Justitia for the European Payment Report 2015 — finds that nearly a quarter of European companies see a link between late payments and the need to lay off staff; with six out of 10 firms seeing late payments as a deliberate strategy of their debtors.

More than half of the near 9,000 European firms surveyed claim to have been asked to accept longer payment terms than they are comfortable with.

The Department of Jobs, Enterprise, and Innovation expressed concern over the findings, noting that 7% of Irish firms’ yearly revenue has been written off as a result of late payments, far higher than the 3.1% European average. It says the figures show the need for firms to sign up to the Prompt Payments Code.

“Ireland exported over €7.8bn of goods and services in May” said Mark Chandler, managing director of Intrum Justitia Ireland.

“If this was traded within Ireland, based on current payment behaviour, Irish businesses would be forced to write-off €310m due to non-payment.

“There is a cultural belief, in Ireland, that it is acceptable not to pay on time. However, we need to help businesses understand that late payments can be seriously detrimental to cash flow and employment.

“Late payments eat into margins and can destabilise any company.”