Small businesses forced to wait more than 30 days for Govt invoices to be paid

by James Agate

Graydon MD says that the public sector needs to set a better example when it comes to paying for goods and services on time

Research conducted by Graydon UK, a commercial credit referencing agency has found that almost two thirds of Small to medium sized enterprises (SMEs) are forced to wait more than 30 days for Government invoices to be settled.

The survey of 512 businesses reveals that Government departments are continuing to fail to deliver on the pledge by Business Secretary Lord Mandelson to ease the cash flow problems faced by SMEs through the payment of trade invoices within ten days.

According to the Graydon UK survey, 98% of those SMEs questioned supplying government agencies, local government bodies and central government reported that they are still not being paid within the ten day timeframe pledged by Lord Mandelson in October 2008.

The new research also reveals that almost two thirds of SMEs (63%) supplying Government departments are facing a wait of more than the standard trade invoice timeframe of 30 days.

Martin Williams, from Graydon UK, said: “The sentiment underlying the Government’s pledge to radically curtail payment periods in the public sector is laudable but unfortunately it’s now apparent that Ministerial willpower hasn’t been enough to inject more speed into the machinery of the public sector.”

He added “It’s difficult to gauge how damaging the impact of this failure has been in terms of exacerbating the cash flow problems faced by small firms amidst the downturn. What’s certain, however, is that the public sector needs to set a better example when it comes to paying for goods and services on time.”