Hotline to speed up payment to small businesses

Monday, September 21, 2009

Pretoria - Government has launched a hotline to speed up government payments to Small Medium and Micro Enterprises (SMMEs).

Business enterprises experiencing late payments of more than 30 days can call the hotline number on 0860 766 3729 or fax their details to 012 452 0458 for assistance.

The hotline was officially launched by Trade and Industry Minister Rob Davies on Monday amid much fanfare.

Through the hotline, a group of agents will provide a single point of contact to facilitate the speedy payment of service rendered.

Davies said several small businesses had in the past been forced to close down as a result of delays in payments. He said these delays have occurred despite provisions of the Public Finance Management Act, which calls for contractual obligations on accounts to be settled within 30 days of receiving the invoice.

"It is our experience that small enterprises are still being paid extremely late and in some instances after 90 days and this is adversely affecting the viability of small business," Davies said.

He pointed out that the delays could be absorbed by larger companies with access to credit, but for small firms late payments can have devastating consequences.

About 760 government departments, agencies and municipalities were asked to supply the call centre with the names of people responsible for payment of services and 512 have responded.

Minister Davies said it was important that government departments get their house in order in order for the state to meets its obligation.

He further said payment processes within government needed a complete overhaul. "Some of the procedures and processes have remained a stumbling block and it's a major challenge that we need to address.

"Of course we need to ensure that the processes and procedures are such that they ensure proper control and efficient use of resources but we must at the same time cut out the unnecessary stress and procedures that delay payments unnecessary," he said.

According the Small Enterprise Development Agency (SEDA) Chief Executive Officer Hlunelo Lupuwana the turn around time for businesses to receive assistants was five days.

There are about 2.4 million registered SMMEs in South Africa accounting for 40 percent of the country's Gross Domestic Product (GDP). "So you can imagine the volume of calls we are receiving and that is why calls will be categorized with those businesses whose payment are late by more than 90 days receiving priority," Lupuwana said.

SEDA will be responsible for the day-to-day operation of the call centre and the agency will compile annual reports that will identify the major reasons for late payments, while it will list government departments prone to the problem.