A new EU Directive on late payments increases the statutory payment period from 30 days to 60 days. Under the directive, public authorities must pay for goods and services within 30 days or, in exceptional circumstances, within 60 days.
Enterprises will have to pay their invoices within 60 days, unless they expressly agree otherwise and it is not grossly unfair to the creditor.
Businesses will be able to claim interest for late payment and to get a minimum fixed amount of €40 as compensation for recovery costs.
Irish businesses are among the slowest in Europe for making payments, taking an average of 66 days to settle their invoices, according to the European Payment Index 2012 which was published yesterday. The average across the EU is 52 days.
The Irish figure has continued to rise over the past decade despite the introduction of the late payments directive here in 2002. It was 58 days in 2008, 62 days in 2009, and 65 in 2010 and 2011.
Latest figures show 2.8 per cent of total turnover (or €4.5 billion) was lost in Ireland in 2012 due to late payment, according to credit management company Intrum Justitia, which compiled the Payments Index. However, public sector organisations here are better at paying than many of their EU counterparts, taking about 48 days, while public sector bodies across Europe take on average 65 days, according to 2012 figures. In Greece, the average was 174 days, while in Italy, it was 180 days.
The directive is due to be transposed into Irish law in March.