John Perry (Sligo-North Leitrim, Fine Gael)

Payment terms in commercial transactions are determined by the parties concerned and the responsibility for the collection of those payments and general credit control rests with the selling enterprise, in the first instance. The issue of late payment is covered by the European Communities (Late Payment in Commercial Transactions) Regulations 2002, SI 388 of 2002.

Under these regulations, it is an implied term of every commercial transaction that where a purchaser does not pay for goods or services by the relevant payment date, the supplier shall be entitled to interest, "late payment interest", on the amount outstanding.

In the absence of any agreed payment date between the parties specified in the contract, late payment interest falls due after 30 days has elapsed, provided the invoice is not subject to query. Since 2009, Departments have been improving their respective payment times, so as to assist the cash flow of businesses, which is critical, and are now obliged to pay their suppliers within 15 days of receipt of a valid invoice. This has been extended across all Departments. The 15 day prompt payment rule was introduced to Departments on an administrative basis.

Departments are required to report quarterly on their performance in meeting this target. To date, six sets of quarterly returns have been published on the website www.deti.ie. The ongoing publication of these returns by my Department provides clarity on the performance of individual Departments.

As part of the commitments in the EU-IMF programme the 15 day prompt payment rule is being extended beyond Departments and is being rolled out to the Health Service Executive, local authorities, State agencies and all other public sector bodies, excluding commercial semi-State bodies.

Businesses experiencing any difficulties in securing payments should in the first instance approach the body concerned. Any failure to comply with the initiative can be brought to the attention of the relevant Minister with responsibility for the body concerned. This initiative, which is critical, should have a considerable impact on the cash flows of small companies.

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