Pretoria - The Small Enterprise Development Agency's (Seda) Public Sector SMME Payment Assistance Hotline has facilitated R300 million worth of late payments on behalf of SMMEs for services rendered to public sector institutions.
The hotline was established in September 2009 with the objective of ensuring that late payments - payments that went unpaid for more than 30 days after submission of invoice - are kept to a minimum and SMME's liquidity is not negatively affected.
Seda CEO, Hlonela Lupuwana, said the hotline had performed well and would continue to play a significant role in helping SMMEs stay afloat in the current trying economic conditions.
"Reports say around 440 000 small businesses have closed in the last five years and many of them would have closed because of cash-flow problems. Within this context, the role of the hotline becomes even more significant," she said.
Since its formation, the hotline has taken up 7 109 late payment queries with public sector institutions on behalf of SMMEs and, of these, 5 155 have been successfully resolved, resulting in payments worth R300 million to SMMEs.
But Lupuwana said the hotline could do better. "Although we've successfully resolved over 70 percent of the queries brought to us by SMMEs, the number of unresolved cases is still too great," Lupuwana said.
She said Seda was continually trying to find ways to overcome some of the challenges in trying to facilitate late payments for SMMEs. "We will not be satisfied until late payments are brought to an absolute minimum," she said.
In the two-and-a-half years the hotline has been operational, it has identified common challenges, faced by both SMMEs and public sector institutions, which lead to late payments.
Challenges faced included SMMEs not being informed of the payment process; SMMEs not always being provided with official order numbers when they render services in emergency situations; the verbal appointment of SMMEs to render services, government departments often requesting additional services to be provided on existing contracts without adhering to the proper contractual process such as issuing variation orders; departmental officials not forwarding invoices to the correct divisions within the department and not being informed when invoices are lost or misplaced.
On the other hand, public sector institutions often have to grapple with the quality of work or goods that SMMEs render, not matching the standard of work agreed upon or specified in accordance with the contract; unfinished work by SMMEs, SMMEs continuing to render services even though the contract has lapsed; invoices being misplaced or lost when departments or public sector institutions restructure; SMMEs not submitting original tax invoices and a lack of continuity of government officials leading to confusion regarding the status of contracts, among others.
Seda said it wants to intensify its education campaign to ensure that more SMMEs are made aware of the hotline and how to use it, as well as ensure that all parties are aware of the pitfalls that cause payment delays so they can avoid them.
The Public Sector SMME Payment Assistance Hotline can be reached on 0860 7663 729 (0860 SMME PAY) or through its website at www.acall.co.za.
