Cash flow is a basic necessity of a small firm, it is their lifeblood to keep the business in shape and have its day to day expenses covered. This is their inevitable source of existence. Having constraints to its cause livelihood will eventually lead to a company’s downfall.
ISME, which is a small business group, said that smaller trade industry are suffering due to intentional delayed payments from large businesses and even state agencies. These small businesses are forced to give longer credit days to large corporations. This creates cash flow difficulties to small entities as they have to find a way to come out with additional funding for the holdup.
ISME have reported that there is an average payment period of 72 days in Ireland, which is a minimal improvement from the 73 days average in autumn. They also added that 43% of small industries are experiencing delays on their receivables and can reach to a maximum of 3 months or more.
Mark Fielding, chief of ISME, said that these instances only shows that big companies are letting small enterprises to accept credit terms outside of what is legislated by law. If small businesses are required to pay within 30 days but they are led to give 90 or even 120 days credit days to larger establishments will only mean an unjust business practice.
Small businesses need a powerful hand from the government to aid them in their growth. With a minister asleep on his duty, we will expect no solution and this will just lead to the demise of each and every nurturing establishment.
