There were 2,163 registered company insolvencies in June 2023, according to the latest figures from the Insolvency Service.
While this was fewer than the 2,552 recorded in May, it shows a 27 per cent rise year on year, with 1,688 registered in June 2022.
Figures from June 2023 included 260 compulsory liquidations – 77 per cent higher than in June 2022 – and 1,759 Creditors’ Voluntary Liquidations (CVLs), which was 21 per cent higher than last June. The number of administrations and Company Voluntary Arrangements (CVAs) was also higher than in June 2022.
While many factors causing the rise in company insolvencies are beyond your control – including the lingering impact of the Covid-19 pandemic and economic challenges brought about by the war in Ukraine and the cost-of-living crisis – there is one factor that you can influence and that is better management.
Key actions to avoid your company becoming insolvent
Know your figures
Without up-to-date accounting records, it’s impossible to create accurate cash flow forecasts, and you’re unable to analyse your past business performance or make sound decisions on how to fine-tune your day-to-day operations for the better.
A great starting point would be to invest in a cloud-based accounting system. With the appropriate links to your bank, the time required to enter your transactions is greatly reduced.
Larger businesses with large numbers of transactions could benefit by using an accounting outsourcing facility. This will cost money but can be beneficial if it means that all your VAT and PAYE returns are up to date, and you can see exactly how your business is progressing.
Use services on offer
Your local chamber of trade will offer a range of business services exclusively available to members and it may be worth joining. These services help members thrive by demonstrating cost savings, offering unique benefits and helping to drive business growth.
Similarly, local enterprise partnerships (LEPs) undertake activities to drive economic growth and job creation. LEP Growth Hubs support businesses facing the cost-of-living challenges and are a useful resource if you are looking for business funding, support or guidance.
Don’t be afraid to look at alternatives
If your business is struggling and you are not sure how to get things back on track consider having a chat with an insolvency practitioner.
This does not have to be the end. They have tools that can allow your business breathing space to restructure or refinance.
This can mean that you can continue to trade in a more viable way, thereby saving jobs and maintaining relationships with your customers and creditors.
For more information and support please call 0808 1445575 or email help@armstrongwatson.co.uk
