Culture of not paying a large contributor to Irish downturn?

Justin1982

I thought this was an interesting article in the indo, particularly this comment:
"People are telling us it's the SMEs that are not paying each other."

http://www.independent.ie/business/irish/businesses-here-say-57pc-of-customers-wont-pay-bills-on-time-30300025.html

I don't run a business in Ireland myself. I work for a large multinational. But one of the things that would turn me off running a business in Ireland is the culture of "dont bother paying your dues or your debts or anything if you can get away with it". It seems to me to be a major problem just from my day to day dealings with the ordinary Joe Soap in Ireland. Anywhere I worked outside of the Public Service or a large multinational, I've always found a large proportion of employers and employees would rip you off for every penny they could. Even experiences like lending money to family or friends or the huge problem banks are having with people who can pay their mortgage just not paying their mortgage because they don't feel like it or listening to people say they won't pay water taxes.

Of course I'm not trying to paint everyone with the same brush. A large proportion of the Irish population are as honest as the day is long and some people/businesses do fall on hard times occasionally but I still reckon that there is still a large proportion of society in Ireland who are just out to rip off everyone for what they can get and its this sizeable portion of Irish society that's really creating a huge problem for the Irish economy. So when I see a stat like 57pc of customers wont pay bills on time its no surprise to me at all.

Kind of find it funny that SME's are always whinging about how hard they have it during the recession and then you read a comment like the one at the start of this post

nesf

I don't think you can generalise here. From working in the SME sector it's very dependent on which industrial sector you are in. Bad debts are a problem everywhere, every decade but some sectors suffer much more from it than others. It's also certainly not limited to the SME sector btw.

Idbatterim

I work in the family business and we do quite a lot of b2b, in my experience its once in a blue moon we would encounter such an experience.I know of a supplier of ours though and the amount he has to write off is insane. There is no way legitimate well runs businesses who can actually afford to pay are not doing so in the vast majority of cases IMO...

experiMental

I haven't done the numbers, but the culture of "not paying" has probably not contributed that much to the downturn. After travelling through many countries, one thing struck me in Ireland : the amount of service businesses - like pubs, retail, etc. It's probably not economically feasible to run that many pubs and shops in a small country.

Another thing are the structural difficulties - like property costs, etc. If the rent would be lower, then companies would have more money to spend on core business activities rather than expenses. And here we go back to the services : "fixing" companies such as taxation and property administration are expensive, but they need companies that build things in order to fix and get money off them. So in order for the economy to run, there has to be a certain balance between "fixing" and "building" types of businesses. Unfortunately, in many countries, there are much more "fixing" businesses than needed, and not enough "building" ones.

I think the government was too strict on funding "building" types of businesses - it was too focused on profits and growth. The people funding those were far too risk-averse, and it showed.

Way too often, the players are blamed but not the system.

sin_city

Generally I find the people running SME are in the higher rate of suicides due to financial downturns than those that work in large multi-nationals