Late payments affecting 58% of small Irish businesses as inflation takes its toll

As rising costs and falling sales continue to bite, small Irish businesses report that 58% of them are paid late, according to Enterprise Nation's Q3 Small Business Barometer report.

A whopping 85% of small Irish businesses say they have been impacted by rising costs and 38% of firms said sales have fallen.

This comes as over one-third (34%) of business owners said that inflation is their biggest economic challenge in the next three months, followed by energy costs (22%) and operational costs (20%).

Enterprise Nation's Small Business Barometer takes a quarterly look at the views and confidence of close to 1,000 small firms across Ireland and the UK. The Irish sample represented 20% of the overall sample but was largely in line with the findings from across the UK.

Late payments

Of those affected by late payments, 37% report that it occurs regularly. Over half (55%) report that one-fifth of their invoices go beyond their terms. A further three in 10 (29%) said that up to 40% of their invoices are paid late.

Emma Jones, founder and CEO of Enterprise Nation, said:

"Now is the time that we need to build supports around small businesses and it's disheartening to see that the majority are impacted by late payments. If small businesses are to survive the current headwinds, we call on larger enterprises to review their payment practices to ensure that they're paying their smaller suppliers within terms."

Borrowing

The barometer found Irish entrepreneurs plan to borrow in the next 12 months, with 83% reporting that they plan to access funding. Just under half (47%) plan to borrow €10,000 or less with a further third (29%) planning to borrow up to €30,000.

Emma Jones said:

"Without question, the most challenging macro-economic environment we’ve seen in a decade is beginning to bite and small business outlook has further deteriorated.

"Business owners tell us they plan to borrow in the next 12 months to meet the challenges that they're now facing including inflation and rising costs. Our research shows that access to finance is one of the most complex areas for small business to navigate and so entrepreneurs should carefully explore the options to ensure that the finance they seek is correct for their business needs."

Rising costs

Rising costs have impacted 85% of small Irish businesses but only four in 10 have increased their prices. Of those that had increased prices, 45% said it was by less than 10 per cent with four in 10 (39%) increasing costs by less than 20 per cent.

Dwindling sales

38% of firms said sales had fallen as a result of the cost of living crisis, up from 30% in Q2 with one-third (33%) saying they had remained the same. 22% reported sales were down, but were not sure if it had been caused by broader economic pressures.

Growth

Only 15% of Irish businesses said they expect to grow in the run-up to Christmas and 45% of businesses expect to shrink. Three quarters of all businesses (75%) expected profitability to be down this year, up from 64% in Q2.

Read the full report

View the full Enterprise Nation Small Business Barometer report