Payments to SMEs in 30 Days? We’ll see if it’s possible
The European Union Commission has presented a new proposal for a regulation to address delays in commercial payments, with a focus on the protection of small and medium-sized enterprises (SMEs), as well reported by ItaliaOggi
This proposal aims to introduce clearer and more stringent rules to ensure that payments are made in a timely manner and to promote the competitiveness of businesses in the EU
The main points of the proposal include:
- 30-day maximum limit : The new proposal establishes a maximum limit of 30 days for payments in commercial transactions, including those involving public administration. This limit will be uniform across all European Union countries.
- Automatic payment of interest and clearing fees : The proposal provides for the automatic payment of accrued interest and clearing fees in the event of late payments. This should incentivize companies to meet payment deadlines.
- Enforcement and appeal measures : New measures are introduced to protect businesses from bad payers. These measures should simplify the process of recovering late payments and ensure that SMEs are able to enforce their rights.
The aim of these measures is to address the problem of late commercial payments, which has a significant impact on SMEs. It is highlighted that a quarter of business failures are caused by late payments and that many invoices are paid late or even unpaid. This has a knock-on effect that affects the competitiveness of businesses, increases financing costs and causes further delays in payments.
The Commission argues that a reduction of even a single day in payment delays could lead to significant savings for EU businesses and improve overall cash flow. Furthermore, it seeks to address asymmetries between debtors and creditors, which often lead suppliers to accept unfair payment terms.
These measures are part of a broader legislative package aimed at supporting the competitiveness of businesses in the European Union. The Commission believes that ensuring timely payment of invoices is crucial for the effective functioning of businesses and for promoting a healthy economy within the EU.
It will be interesting to see it applied
It will be really interesting to see such a rule applied in Italy, especially by the Public Administration. According to the radicals, the state debt compared to suppliers is equal to 60 billion, equal to 2.6% of GDP. It seems rather doubtful to me that a European directive is enough to solve the problem, and I think it will be more appropriate to already provide for the payment of interest on the invoice.
Furthermore, payments are important, but equally important is the bureaucratic burden on the shoulders of small companies, the immense amount of burden and controls to which they are subjected. I would invite the public manager to open a bar or bakery to try it in practice. Without forgetting that without internal demand there is no production.
Collection is therefore an important element, but absolutely not the only one, to guarantee the survival and growth of the European SME fabric. And we repeat: then these rules must be seen applied in practice.
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The article Payments to SMEs in 30 Days? We'll see if it's possible, it comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/pagamenti-alle-pmi-in-30-giorni-vedremo-se-e-possibile/ on Wed, 13 Sep 2023 10:00:33 +0000.