SATSA has urged members to pay small and medium enterprise (SMEs) tourism suppliers timeously to avoid long-term economic damage to the most vulnerable businesses in the sector.
“The impact of COVID-19 on all business has been devastating, but particularly for SMEs, which do not need the additional burden of not receiving payment on outstanding invoices,” said SATSA COO, Hannelie du Toit, in a recent SATSA Newsflash.
A recent COVID-19 National Small Business Survey by the National Small Business Chamber (NSBC) indicated that outstanding payments were at an all-time high and that the average amount owed to each SME was at its highest level.
According to the NSBC, big business and government are mainly to blame for late payments to SMEs More than half of all SMEs in South Africa are burdened with late payments. The result is that SMEs are going out of business due to late payments, which puts pressure on their cash flow, highlighted the NSBC report.
“Intentional late or non-payment is totally unacceptable as, in most cases, when an SME goes out of business, a family goes out of business. Procurement policies urgently need to be changed to accommodate for early, or at least on-time, payments to SMEs,” said Du Toit.
She concluded by saying that paying SMEs quickly could be seen as a meaningful contribution to growing the current economy.