Small firms are losing £5bn to insolvent trading partners

New research shows that more than 40% of small to medium enterprises (SMEs) have lost money to trading partners who've gone out of business in the last two years.

A survey carried out by CreditPal revealed that the average amount of money owed to individual firms by insolvent partners is £7,500. The total figure owed to all SMEs is estimated at £5.3bn.

The figures highlight the need for firms to take early action when faced with overdue invoices. Excessive delay can mean missing out on vital payments being made in the months leading up to a trading partner becoming insolvent.

Once the partner becomes insolvent, it is highly unlikely that creditors will receive all of the money they are owed. It will usually only be a percentage and in many cases creditors may receive nothing at all.

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