There are many uncontrollable factors which can cause companies to go Bankrupt, maybe demand for a product or service reduces or changes in the economy make trading conditions to harsh. However, new research reveals that one of the primary (controllable) reasons forcing companies to file for Bankruptcy should be avoidable, as customers delay payment on invoices.

According to a leading payment analyst group, UK business’s become indebted by almost £20 billion each year as a result of late payers. Astoundingly, 25% of all business’s declaring insolvency have stemmed from this reason alone. Research reveals that companies are delaying payments by 8 days longer than when the PPA was introduced in 1998.

At any given point, an estimated 50 per cent of all outstanding invoices are overdue, resulting in substantial job losses as companies struggle to trade. This is in spite of changes made to the late payment act, devised specifically to tackle such issues.

It is also noted that the number of business professionals applying for IVA’s, accounts for a sizeable chunk of the total number of new IVA cases per annum.