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Customers' late payments forcing Irish businesses to dismiss staff

Report reveals businesses are still facing challenges to growth

 
 
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PRLog - Jun. 3, 2014 - LONDON, U.K. -- A recent Europe-wide business survey has revealed no improvement in the pressure on European businesses from customers’ late payments, with 55 per cent of businesses across Europe reporting late payments resulting in loss of income, 63 per cent claiming additional pressures on liquidity, and 50 per cent citing late payments as having a direct impact on company growth.

In the Republic of Ireland, 47 per cent of businesses surveyed claimed late payments had impacted their business to such an extent that they had been forced to dismiss staff.  60 per cent claimed the problem had forced them to put recruitment plans on hold.

Tony Carey, managing partner of Russell Bedford Dublin member firm Cooney Carey, puts this down to the challenges faced by businesses' debtors themselves.  “It is interesting to see that 88 per cent of businesses surveyed cite their clients’ own cash-flow problems as the main reason for payment delays.  In our experience, it is very rare for a company to delay payment purely as a deliberate tactic – usually a cash-flow strategy on their part.”  Carey notes that the Irish banking system is only now making headway in resolving its own liquidity positions in order that it can lend.  However, the withdrawal of a number of international banks has meant that a significant amount of available funds are being used to refinance existing banking arrangements.  Insurance-based products (such as “supplier finance” and invoice discounting) have similarly been badly affected by the withdrawal of international insurance companies.

“There are very definite signs of recovery, however.  Ireland was the first country to hold our hands up and declare the problem, and the first to take the pain to address it.  Confidence is growing and liquidity is returning.  The lessons are clear, though: management attention needs to be focussed on planning cash flow as well as profitability.  Too often a business’s projections consist only of a profitability and sales forecast.  If a customer is having problems with payment, you are not doing them – or your business – any favours in looking the other way.  Our advice on any cash-flow issue is quite straightforward: act now.  Agree a sustainable payment plan and ensure that it is maintained.”


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Source:Russell Bedford International
City/Town:London - London - United Kingdom
Industry:Accounting, Business
Tags:accounting, tax, audit, international, russell bedford
Shortcut:prlog.org/12331768
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