Many big businesses treat SMEs as a line of credit, Small Business Institute says

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Small and medium enterprises are urged to claim interest and debt recovery costs for late payments

An advocacy body for small and medium enterprises has urged small-business owners to consider claiming interest and debt recovery costs from companies or government departments that fail to pay for goods or services on time.

Figures released in September 2017 by the department of small business development show that close to 72,000 invoices to the value of R4.3bn were unpaid by government departments and were older than 30 days. Over 23,000 invoices were paid late by provincial government departments in 2016, totaling more than R2bn.

“In effect they are running their businesses, earning interest, and improving their own cash flow with money owing to the small businesses we all say we value,” said Swanepoel. The SBI recently sent a letter to each of the top 100 companies on the JSE, asking whether they are paying small businesses within 30 days from invoice, which is a government policy.

 

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Don’t understand why invoices are being paid more than 30 days later...especially when the institution requested urgent delivery and we complied within days. Totally unacceptable, small business is not sustainable when payment is not forthcoming...

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