Fewer than 40 companies have signed up to a Government-led initiative aimed at encouraging businesses to pay suppliers promptly.
The Prompt Payment Code of Conduct, which was introduced in March 2015, seeks to encourage organisations to ensure they make payments as quickly as possible.
The initiative was jointly established by the Department of Jobs, Enterprise and Innovation and the Irish Institute of Credit Management (IICM). It is supported by all the main business representative groups - ISME, SFA, Chambers Ireland and IBEC, and also has the backing of the Banking and Payments Federation of Ireland.
All Government departments, their agencies and public sector bodies are signatories to the voluntary code. It was hoped that the launch of an online portal early last year would also encourage businesses to sign up to the initiative. However, this has proven fruitless with just a handful of companies opting to back the project, despite it being heavily promoted at seminars and conferences across Ireland.
Details on the disappointing take-up rate for the code are contained in a new tender notice published by the Department of Jobs, Enterprise and Innovation. The department is currently inviting requests for tenders for the provision of a six-month publicity campaign to promote awareness of the campaign.
“We are disappointed by the take-up rate and the purpose of the new campaign is to try to make more businesses aware of the code and of the fact that it was created to benefit them,” a department spokesman told The Irish Times.
“The code was built in partnership with representative bodies and now we really need them to work with us to more engage with their members to encourage more companies to sign up for the code,” he added.
Those who do opt to sign the voluntary code pledge to pay suppliers on time, within the terms of contract; to give clear guidance to suppliers on payment procedure; and to promote adoption of the code.
Late payments continue to cause considerable liquidity issues for many small and medium-sized businesses.
According to Isme, the average payment period for SMEs improved by two days to 57 days in the second quarter of 2016. However, as many as 17 per cent of companies said they had recently experienced payment delays of three months or more.
Isme has previously urged the Government to introduce a mandatory 30-day payment period for all businesses trading in Ireland.
Seeking to lead by example on the issue, a 15-day prompt payment arrangement was introduced by the then government in 2009. Initially aimed solely at central departments, it was later extended to all State agencies.
Recent figures show 86 per cent of department bills were paid within 15 days of receiving a valid invoice in the second quarter.
