Late payment for goods or services continues to create serious problems for businesses in the UK, with some being driven into insolvency.
According to new research from R3, the insolvency and restructuring trade body, at least 20% of corporate insolvencies in the UK in the past twelve months were caused by late payment or the insolvency of another company.
The survey of insolvency professionals found that late payment was a primary or major cause of 23% of insolvencies in the past year, while the failure of a supplier or customer was the primary or major factor in 20% of cases.
R3 highlights that businesses have been facing these problems for some time. A previous survey in 2014 found that late payment was a primary or major factor in 20% of corporate insolvencies.
“On the surface, late payment or the failure of another company can seem like factors outside a business’ control, but there are plenty of steps a business can take to reduce the risks posed by its supply chain and customer base,” commented Andrew Tate, R3 president.
“Businesses must not be complacent when it comes to checking who they are trading with,” he added. “If a business is not paid upfront it is essentially acting as a lender – albeit without the protections a secured lender enjoys. Keeping track of invoices and getting paid is vital.”
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At Miller Samuel Hill Brown, we fully understand the impact late payment of debt can have on you or your business. If your business is suffering as a result of unpaid debts, it may be time to take action, so contact us today - our team of specialist debt recovery litigation solicitors are here to help.
