According to statistics from the Federation of Small Businesses (FSB), a quarter of insolvent businesses go bust because invoices are being paid late.

This statistic, combined with research from the payments group Prompt Payer that the cost of late payments is £20 billion per year, shows a worrying trend.

The Late Payments Act was introduced in 1998, but credit ratings group Experian have research which indicates that companies now take 8 days longer to pay invoices than they did in 1998, the year in which the Late Payments Act was introduced. The increase in late payments suggests that the Act has been unsuccessful, despite the devastating effect that this has on the small business community.

The managing director of Prompt Payer, Mark Flower stated:

"Survey results highlight the need to place late payment higher on the agenda, encouraging companies to take an active stand against the issue and put an end to late payment once and for all."

Making sure that your company receives its payments on time could be a significant method to protect your business against insolvency, click here for more information.