Some small and medium-sized companies are facing bankruptcy because of continued delays in payment, according to a new report.
An Isme survey of over 500 firms indicates that the delay in payment has increased to 76 days on average.
Only 16 per cent of firms surveyed said they were paid within 30 days while 47 per cent claimed they were experiencing delays of 90 days or more.
In addition, 17 per cent of small and medium-sized companies said they were waiting over 120 days for payment, up 10 per cent since the start of the year.
“The situation is continuously deteriorating as the delays have increased from 60 days in Autumn of 2007 to the current excessive 76 days, and banks are, in the main, refusing to extend credit limits to assist cash-flow,” said Isme chief executive Mark Fielding.
“The fact that so many companies are being forced to wait longer for payment shows that the seven year old legislation is useless and should be amended, as small businesses continue to be squeezed by their larger counterparts,” he added.
Isme has urged the Government to introduce a mandatory payment period whereby all companies would be guaranteed payment within 30 days from the end of month of invoice or delivery.
