Irish businesses slammed for bad debts
Date: 24-05-2007
Source: Irish Examiner
European provider of credit and revenue management services Intrum Justitia, has today criticised Irish business for bad debt management. The group's annual European Payment Index survey confirmed that, at 5.3%, Ireland?s economy is projected to be the fastest growing economy in 2007 across all European countries surveyed. However the study also highlights the growing failure of Irish businesses to address alarming levels of debt and late payment habits. While the latest survey predicts that Ireland will top the poll in the Eurozone for the foreseeable future it also reveals the timeframes in which Irish companies receive payments, as well as analysing payment delays and risks. In Ireland, average payment duration and payment delays have both actually increased over the previous year to 52.2 days and 14.3 days respectively, in marked contrast to the rest of Europe where average payment times have improved. The study also highlights that payment duration in Ireland is now almost double that in other European countries while the level of bad debt write-off is 71% higher than the best performing countries. Furthermore, it shows that outstanding invoices due to Irish companies and greater than 90 days old have increased by a massive 94% in the past year. These latest trends in late payments are putting Irish companies at significantly increased risk of suffering cash flow problems and in serious cases will place more companies in danger of bankruptcy. Managing Director of Intrum Justitia, Nick Biggam, said: "This latest survey has illustrated to us the disturbing trend on late payments, which reinforces Ireland positioning as one of the worst late payers in Europe. "If not addressed, this will be detrimental to the future profitable growth of many Irish businesses, particularly within the SME sector. "We do see however that companies are starting to recognize these issues and more businesses are taking action to tackle the problem. "We are experiencing a significant increase in the numbers of companies asking Intrum Justitia to provide full credit and revenue management solutions. "However, in addition to action from companies we believe that further changes in legislation are required to reduce the costs to business of late chasing late payment and to better facilitate swift and cost-effective legal action towards late payers." Intrum Justitia Ireland is part of Europe's accounts receivable management services company. In Ireland, the company employs 65 staff and is the largest employer of outsourcing credit management. The group operates in 23 countries.
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