The average invoice payment time for public bodies is slowly decreasing, according to a report into implementation of EU Directive 2011/7 to tackle late payments for commercial transitions, published by the European Commission on Friday 26 August.
The report says that for private commercial transactions, bar a handful of member states with relative poor performance, the payment deadlines laid down in the directive tend to be respected. The European Commission therefore feels that there is no need at this stage to adjust EU legislation, preferring instead to wait for the directive that came on stream in March 2013 to produce its effects. EU law requires public administrations in the EU to pay their suppliers within 30 days of the date of invoice (60 days in exceptional cases) and urges companies to pay their suppliers within 60 days (EUROPE 10804).
Nevertheless, an external study of November 2015 carried out by consultants VVA, Technopolis and Ernst & Young, found that in more than half of member states, public administrations were failing to respect the 30-day payment deadline laid down in EU legislation. Each day won in terms of timely payment allows savings in terms of fresh finance estimated at €158 million, explains the study. Around half of companies facing late payments do not dare to demand financial compensation because they want to maintain good trading relationships with the powers that decide on public contracts and/or private clients.
The report published on Friday identifies a number of obstacles to application of the directive. The absence of national or European follow-up mechanisms makes it difficult to assess changes in payment times. Stakeholders want some of the directive’s terms and measures to be clarified, such as 'grossly unfair' or ‘objectively justified in the light of the particular nature or features of the contract.’ Finally, the report recommends that the Commission identify good practice and share it among the member states, and also explore the possibility of collecting comparable data on the performance of national judicial systems for complaints lodged by companies suffering from late payments. (Original version in French by Mathieu Bion)