Small firms suffer with late payment

 Small firms suffer with late payment

Research by R3 suggests that late payment for goods or services was a primary or major cause of 23% of insolvencies over the past year. The problem has worsened since 2014, when a previous survey found that late payment was a primary or major factor in 20% of corporate insolvencies. According to the Insolvency Service, there were 15,958 insolvencies in the past 12 months. Previous research by R3 found that 6% of UK businesses, equivalent to 113,000 firms, were creditors in an insolvency last year, with more than half of insolvency practitioners identifying construction as the sector with the worst record for late payment. Separate research by Paym has found that Britain"s 3.3m sole traders lose a total of £8.1bn a year from late, delayed or underpayment. The study found self-employed traders lose out an average of £2,472 each per year, while three in ten sole traders - about 990,000 businesses - have written off a payment in 2016, compared with 23% of those surveyed in 2015.

Source: The Mail on Sunday (21/08/2016)