News item | 06-07-2023 | 11:30
Since 2013, governments have been obliged to pay their invoices to entrepreneurs within 30 days. Since July 2022, this also applies to payments from large companies to SMEs. 96.1% of ministries and 93.5% of provinces paid on time in 2022. Suppliers who sent an invoice to municipalities had to wait longer for their money in 2022. Only 62.4% of all municipalities paid more than 90% of invoices within the supplier’s term. This is written by Minister Adriaansens (Economic Affairs and Climate) to the House of Representatives.
“Entrepreneurs’ bills must be paid on time. This applies both to companies themselves and to payments from the government to entrepreneurs. In addition to the legal obligation, the government also has an exemplary function. Municipalities must do their best to ensure that their suppliers receive their money on time.” Adriana said. The minister will talk to the Association of Netherlands Municipalities (VNG) to see what municipalities need to pay entrepreneurs’ invoices on time.
Payment of large companies to SMEs
To ensure that large companies pay SMEs on time, the maximum payment term for commercial transactions from large companies to SMEs has been reduced from 60 days to 30 days on 1 July 2022. In 2022, the average payment term from large companies to SMEs fluctuated between 40 and 43 days.
Desirability of compliance supervision by the government
Commissioned by Minister Adriaansens, bureau AEF has investigated whether establishing public supervision of compliance with the payment term by large companies is currently useful and desirable. AEF concludes that this is not the case now. The effects of the ‘Act shortening the statutory payment term to 30 days’ are not yet known, because a transitional arrangement of one year applied to agreements concluded before the amendment to the law. Since July 1, 2023, all agreements between large companies and SMEs are only subject to a maximum payment term of 30 days.
That is why Adriaansens has decided to further map out the possibility and desirability of government supervision during the evaluation of the law at the beginning of 2024. In this way, she wants more insight into the nature, scope, concentration and causes of the problem and alternative solutions. It also includes information about the causes and effects of bad payment behavior and possible solutions from other countries of the European Union.
Supervision of compliance by the government can encourage companies to pay their bills on time, as appears in France and Poland. But public compliance supervision also has disadvantages. It puts pressure on the relationship between the supplier (SME) and the customer (large company) because the supplier must first report the slow payment by his customer. Public supervision also requires a great deal of government capacity.
Alternative solutions for faster payment
That is why the minister also wants to investigate other options for reducing the payment terms of large companies to SMEs, such as e-invoicing to speed up payments in the business community. In addition, she wants to explore whether the reporting obligation for large companies, which will probably be included in European legislation, will lead to faster payments to SME suppliers.