It is of no surprise that it has been reported that nearly a quarter of UK firms revealed a slump in trade over the past month amid cost of living pressures.
Company insolvencies in England and Wales soared 40% last month as businesses struggle with rising costs and energy bills due to widespread inflation.
The Insolvency Service has reported that there were some 1,691 insolvencies in June 2022 which is 15% higher than the number recorded in 2019, pre-Covid.
There is a significant increase in Creditors’ Voluntary Liquidation (“CVL”) which is 30% higher than June 2021 and 44% higher than June 2019.
There are still unknown challenges ahead of us and this uncertainty will make it difficult for SME’s to plan and assess the risks they may have. Also, the possibility of a further rise in interest rates will affect your customers making payment on time. It is time to make an essential business plan and important to keep an eye on your aged debt ledgers, reviewing them weekly with your finance team and identify any customers who are sharing signs of struggling financially.
Cash flow is a reality – late payment can cause considerable cash flow issues for your business especially when the late payers are large customers. Our recommendation is to consider referring to legal when invoices hit between 45 days overdue.
Our specialised Debt Recovery team are here to assist with collection or advice. Our team offer an efficient and cost effective debt recovery service on standard fixed charges.
Our service includes:
- Sending letters before action
- Issue of Court proceedings
- Enforcement of Judgments
- Bankruptcy and Insolvency proceedings
Consistent with our policy when giving comment and advice on a non-specific basis, we cannot assume legal responsibility for the accuracy of any particular statement. In the case of specific problems we recommend that professional advice be sought.