Dubai Chamber sets up late payments task force
The body will study causes of late payment and publish guidelines for businesses on better working practices
Dubai Chamber of Commerce and Industry has set up a task force to look into the problem of late payments to subcontractors and suppliers, a move aimed at finding solutions to curb the practice.
The task force will carry out research into the severity of delayed payments and its effects on businesses, the trade body said in a statement on Sunday. It will also create "tools and processes" that businesses can adopt to speed up the settlement of outstanding bills.
"Member companies will publish guidelines to help suppliers and sub-contractors avoid and manage late payments and encourage businesses to sign the Dubai Chamber Prompt Payment Charter, under which businesses will commit to abiding by key principles and tackling the culture of late payment by setting a positive example," the statement said.
Members of the task force include Tristar Group, Suez Middle East Recycling, Gerab Group, Hepworth, Pure Energy, Scott Bader Middle East, Dgrade, Infofort and Dubai Technologies.
Last month, 53 per cent of UAE companies in a survey by trade credit provider Atradius said they were concerned about a deterioration in customers' payment practices in the wake of the pandemic. Companies said that 72 per cent of the total value of outstanding business-to-business invoices were overdue, compared to 52 per cent across the rest of Asia.
On average, invoice payments in the UAE currently take 94 days to settle, despite average payment terms being just 57 days, according to the survey.
Both the Dubai and Abu Dhabi governments last year pledged to cut average payment times of invoices to small and medium-sized enterprises to just 30 days.
Both governments have also expedited payments to businesses as part of economic stimulus packages put in place to mitigate the economic fallout from the Covid-19 pandemic.
Published: July 19, 2020 05:34 PM