Late payments a problem for security agencies
Some clients take months to pay up, leading to cash flow problems and even bankruptcy, say industry players
Some private security agencies here often face issues of late payment by their clients, sometimes for months on end, The New Paper has learnt.
Industry players say this perennial problem had seen some firms saddled with huge debts and even going bankrupt.
One such case of late payment involved the Agency for Science, Technology and Research (A*Star), the research and development statutory board under the Ministry of Trade and Industry.
Records obtained by TNP show that A*Star took about 12 months to pay the $25,700 for security services that were invoiced on Dec 31, 2016. A*Star processed the payment only in December last year.
Similar forms of delayed payment took place for other invoices over several months last year, so much so that by the end of last November, A*Star was in arrears of over $157,000 for security services rendered.
An A*Star spokesman told TNP yesterday that it has since paid all outstanding invoices from its security vendor and had offered its "sincere apologies".
The late payments were due to a mistake by one of its staff. A*Star has since counselled and taken action against the employee.
It has also added safeguards to prevent this from recurring, said the spokesman, who added: "A*Star strives to pay its vendors promptly while ensuring that we adhere to the necessary due diligence processes.
"Unfortunately, we did not meet our own standards in timeliness when paying one of our vendors for security services provided."
A*Star is not alone in being tardy with payments.
Mr Gary Haris, senior business development manager at KH Securities, told TNP that he would consider it "very good" if a client settles within three months of the payment's due date.
Late payments can drag on for more than six months, and at one point his mid-sized firm of about 200 officers had more than $1 million of outstanding payments, Mr Haris, 43, said.
"We had to borrow from finance companies and banks because we still had to pay our employees," he added.
Regal Security Services director Maminder Singh, 37, said his firm also had to borrow money to pay its 150 officers because of cash flow problems arising from late payments.
Estimating that 70 per cent of security agencies had to go into debt to stay afloat, Mr Singh added: "This is not what we want but we have to accept it. This practice has even caused some agencies to go bankrupt."
Mr Robert Wiener, president of the Association of Certified Security Agencies (ACSA), which represents about half of the 240 security firms here, told TNP that the problem of late payments has "always been around".
Mr Wiener, who is also the director of security agency Prosegur Singapore, said some clients come up with all sorts of excuses for being late with their payments.
Despite this, all five agencies TNP spoke to said they did not stop providing their services because that would have been unprofessional.
Assured Protection and Consultancy's chief executive, Mr Vicky Nathan, said: "It's unprofessional to withdraw our officers just like that because leaving the premises unguarded could be dangerous.
"We shouldn't compromise security and I don't believe that any security agency would pull out their officers."
Earlier this month, the Government rolled out $10 million in initiatives under the Security Industry Transformation Map to encourage industry players to be more productive and technologically advanced.
On Feb 14, the two bodies representing such firms - the ACSA and the Security Association of Singapore - jointly held a town hall meeting to discuss standardising contracts to spell out clearly when they should be paid.
TNP understands this issue will be discussed in a Security Industry Council Buyers' Seminar today.
Said ACSA's Mr Wiener: "We just want what is due to us to be paid on time so we no longer have to tussle with the problem of late payments."