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Research findings from Graydon UK reveal that government departments are
continuing to fail to deliver on the pledge by Business Secretary Lord Mandelson
to ease the cashflow problems faced by SMEs through the payment of trade
invoices within ten days.
According to the survey, 98% of those SMEs questioned, 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.
This compares with a figure of 99% reported in a previous Graydon UK survey
undertaken in March 2009.
The new research also reveals that almost two thirds of SMEs supplying
Government departments are facing a wait of more than the standard trade invoice
timeframe of 30 days.
These figures compare unfavourably with the March 2009 survey, which reported
60% of firms having to wait more than 30 days to receive monies owed.
Martin Williams, Managing Director, Graydon UK, commented: "The sentiment
underlying the Governments pledge to radically curtail payment periods in the
public sector is laudable but unfortunately its now apparent that Ministerial
willpower hasn't been enough to inject more speed into the machinery of the
public sector.
"Its 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.
"Government agencies may point to issues securing payments from their own
customers as a reason for these continued delays.
"This may be a valid concern in many cases but in truth this merely serves to
underline the need for these public sector bodies to become more efficient at
collecting monies owed and managing their debtors efficiently."
Source: Credit
Control Journal
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