There was an increase in the number of company insolvencies in 2017, according to newly-released Government statistics.
The Insolvency Service has reported that 17,243 companies entered insolvency in 2017, a rise of 4.2% on the year before.
Mike Cherry, national chairman of the Federation of Small Businesses (FSB), has described the figures as "a real concern". Recent FSB research shows that a record number of small business owners are currently looking for an exit, with one in seven entrepreneurs expecting to sell, hand-on or close their business in the first quarter of 2018.
The FSB has identified rising business costs as a key pressure on the UK's small businesses. "The proportion of small firms reporting a rise in operating costs is now at a five-year high," said Cherry. "It's an increasingly unforgiving environment to trade in and we've seen business confidence dropping steadily over the past year."
Cherry added: "What these figures don't reflect is the impact that the demise of Carillion is having on supply chains across the UK. We are working closely with the taskforce set up to mitigate that impact and hope to see as many contracts reassigned as possible over the coming months. Sadly there will be jobs lost and firms forced to close as a result of the misjudged procurement choices and appalling late payment practices that preceded Carillion's collapse."
Data published last week by the Chartered Institute of Credit Management (CICM) shows that large firms are still paying a quarter of all invoices late.
The figures, produced for the CICM by Graydon, stem from the new Payment Practices Reporting Regulations that oblige larger firms with a "Duty to Report" their payment performance. It found that the average reported time to pay was 39 days; 27% of all invoices were paid beyond the agreed terms.
The findings also show that 52% of invoices were paid within 30 days, 33% were paid between 31 and 60 days, and 15% were paid later than 60 days.
Philip King, CICM chief executive, said: "The biggest issue for many SMEs is not the length of payment terms but the certainty that payment will arrive when they expect it. If more than a quarter of invoices are being paid late then the suppliers are seeing a hole in their cashflow which is worrying, at best, and can be catastrophic."