August 26 2016
Research published by the Association of Business Recovery Professionals (R3), the trade body for the UK's Insolvency Practicioners has found that late payment for goods and services was the primary or major cause of business failure in 23% of insolvencies last year. A further 20% of insolvencies were the result of a supplier or customer going into liquidation.
The research was based on a survey of the insolvency profession to uncover the reasons behind business failures. The survey also identified construction as the sector with the worst track record for late payment, with 57% of Insolvency Practicioners surveyed expressing this opinion.
Andrew Tate, R3 president, said:
“A business can have a great product and great staff, but if it doesn’t get paid for what it sells, or if it is over-reliant on one supplier or customer, things can go wrong very quickly. 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.”
Samantha White, CEO of My Credit Controllers said:
“This research shows how vitally important it is for a company to manage its credit control professionally. You should be checking customers before giving credit and managing your collection process effectively.”
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