Unpaid Invoices Pose Huge Challenges For Small Businesses

The non-payment of invoices is causing a huge impact on small businesses that rely on cash flow for survival, according to South Africa's Public Service Commission (PSC).

Speaking at a media briefing in Pretoria on Monday, PSC Commissioner Anele Gxoyiya said, "There is a need for urgent and timeous payment of suppliers given the critical role of procurement in economic development and emancipation," SA News reported.

Gxoyiya noted that the national departments paid a total of 33,394 invoices worth R1 billion after 30 days. Whereas, during the first quarter, these departments had 26,223 invoices valued at R1.2 billion.

At the end of the second quarter, all national departments submitted their 30-day payment reports to the National Treasury, with an average timely submission rate of 89%.

"This represents a decline of 2% when compared with the average timeous submission rate of 91% achieved in the first quarter of the 2023/24 financial year," Gxoyiya said.

The PSC Commissioner stressed that it's important to recognize that making payments after the required 30-day period constitutes to non-compliance.

"Out of 40 national departments, only 17 departments fully complied with the requirement on timeous payments in Quarter 2, which is an improvement from 15 departments in Quarter 1 of the 2023/24 financial year," he said.

He noted that the "number of invoices and the value cannot be determined with information at the PSC's disposal," adding that the departments are encouraged to maintain this performance and pay all legitimate invoices from suppliers within 30 days as required.

Gxoyiya raised concern over 23 departments were not able to comply with the timeous payments of invoices, noting that provincial departments paid a total of 48,478 invoices valued at R5.9 billion after 30 days.

Whereas, in the first quarter, these departments recorded 90,935 invoices amounting to R9.9 billion. He noted that these invoices were paid but not in the required timeframe.

"Although the Government is under financial austerity measures, invoices for services rendered must be paid and Accounting Officers should apply consequence management where necessary to address these challenges," he added.

South African government is supporting small businesses and its ministry to ensure the development of the country.

Earlier this month, the Ministry of Small Business Development warned the people of South Africa about the fake social media accounts of Deputy Minister of Small Business Development, Dipuo Peters.