Insolvents owed money to 113,000 UK businesses in 2015, shows research
Suppliers and customers who entered into an insolvency procedure last year ended up owing money to more than 100,000 UK businesses.
New research from insolvency trade body R3 revealed that 6% of all UK businesses became creditors in an insolvency procedure over the last year, which means 113,000 companies were affected.
R3's Business Distress Index produced the study, which took the form of a long-running survey of 500 UK businesses.
The results showed that different sized firms suffered to varying degrees, with only 4% of large businesses (those with over 250 employees) having been a creditor in the last year. Smaller companies employing only between one and 50 people were affected more, with 5-7% reporting they were part of an insolvency procedure.
Medium-sized businesses that employ 51-250 staff were most likely to have been exposed to another firm or individual's insolvency, and 14% were owed money by an insolvent individual or company.
Two classic problems
R3 president, Phillip Sykes, commented: "Growing businesses encounter two classic problems: going for growth by taking on new customers without properly checking their creditworthiness; and a lack of controls to monitor their exposure."
"This leaves growing businesses, particularly medium-sized ones, as the most at risk of being exposed to others' insolvencies," he explained.
Sykes went on to say that the UK insolvency regime is ranked one of the best in the world, but even so, that does not mean being a creditor in a procedure will see a company get all the money it is owed.
The global pandemic has highlighted many heart-warming and positive stories of grit, resilience, kindness and collaboration from across the planet.…
In just a few months, COVID-19 has changed a number of sectors including tourism, healthcare and education. Each sector is…
All businesses benefit from having a structured approach to expenditure and resource allocation for meeting the company expenses. Proper cost…