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Customers' late payments forcing Irish businesses to dismiss staff
Report reveals businesses are still facing challenges to 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-
“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: