The Business Disputes Register - promoting better business behavior globally
Our Mission is to encourage and promote better business behaviour.
Typical poor business practices include:
- Paying invoices late or not at all
- Non-fullfilment of contract
- Breach of terms
- Breach of confidentiality
- Copyright or trademark infringement
- Abuse of market power
- Industrial espionage
The most often cited dispute involving businesses is non or late payment of invoices. This is a major problem which has serious consequences on the whole economy. Key facts relates to late and unpaid invoices:
- 30% of invoices are not paid within the agreed terms
- Large companies tend to take 30% more time than small companies to pay invoices
- A government initiative to force larger companies (about 7000 companies) to publish payment statistics and practices has so far had no positive impact
- 1 in 5 insolvencies attributed to late payments (source: Trade body R3)
- Other consequences of late payments are paying own suppliers late, getting into increased debt and reducing salaries or paying staff late
- 90% of small company managers surveyed complain they do not have access to tools or information to assess whether they are trading with insolvent companies
Larger companies are ofen the worse culrpits. A study of UK company data has shown that the best 20 companies are on average a quarter of the size of the worse 20 measured in revenue terms. In fact, there is some correlation between size or company and late payments. In the chart below we see that for companies whose revenue is between £10 million and £100 million, payment days get worse the bigger the company going from 30 days to 39 days. Between £100 million and £10 billion, late payments on average plateau at around the 38 day mark. The very biggest companies, between 10 and 100 £ billion do marginally better at 35 days.
Other companies to be wary of are companies that are insolvent or close to insolvant. It is challenging to get up to date publicly available data rating a company's solvency, however thera eare many indicators that offer strong clues. For example:"
- Companies over 40 years old have higher insolvency rates than younger companies. Companies seem to go through a danger phase when they are 9 years old.
- Age related insolvency trends vary considerably by industry. For example, very old restaurants tend not to become insolvent, whereas it is the opposite for newspaper publishing
- PLCs and three times more likely to become insolvent than private limited companies.
- Surprisingly, analysis of UK data shows that companies with a year-end accounting date of July are more than twice as likely to go into administration than companies whose year-end is March.
Industry sectors most likely to become insolvent
|Rank||Industry Sector (Standard Industry Code)||Annual Insolvency rate|
|1||Publishing of newspapers (58130)||5.69%|
|2||Wholesale of meat and meat products (46320)||3.75%|
|3||Licensed restaurants (56101)||2.78%|
|4||Credit granting by non-deposit taking finance houses and other specialist consumer credit grantors (64921)||2.55%|
|5||Manufacture of basic iron and steel and of ferro-alloys (24100)||2.44%|
|6||Licensed clubs (56301)||2.38%|
|7||Manufacture of office and shop furniture (31010)||2.29%|
|8||Manufacture of electric lighting equipment (27400)||2.17%|
|9||Public houses and bars (56302)||2.11%|
|10||Forging, pressing, stamping and roll-forming of metal; powder metallurgy (25500)||2.09%|
Companies less than a year old are the least likely to go into administration within the next 6 months. This is not surprising as most start-ups have enough cash to last 18 months. However, the risk of going into administration shoots up during the first few months since the inception of the company reaching a first peak of 0.8% at 21 months. The companies that survive this first 21 month hurdle gain a reprieve as the administration rate drops to 0.55%, but only briefly as the rate starts to climb up again reaching a peak of just under 1% when companies reach 9 years of age.
|Company type||Number of companies sampled||% in administration|
|PRI/LTD BY GUAR/NSC (Private, limited by guarantee, no share capital)||52,986||0.11%|
|Community Interest Company||11,035||0.12%|
|PRI/LBG/NSC (Private, Limited by guarantee, no share capital, use of 'Limited' exemption)||24,287||0.14%|
|Limited Liability Partnership||36,725||0.37%|
|Private Limited Company||2,709,216||0.55%|
|Public Limited Company||3,845||1.74%|
The Business Disputes Register (www.disputesregister.org) went online in 2018 with the purpose to collect details of commercial disputes and make them publicly available. The register is internationally available and for the benefit of all companies.
The register is owned and operated by: Resolution Technology Ltd, a company registered in the United Kingdom, company number 11705612, whose registered address is Kemp House, 160 City Road, London, United Kingdom EC1V 2NX