Nearly half a million businesses admit to financial difficulties
The number of businesses in ‘significant’ financial distress jumped by 15,000 to a total of 481,000 in the final quarter of last year, according to the latest Red Flag Alert research from Begbies Traynor, the independent insolvency firm.
The hardest hit sector was real estate and property, which not only saw a 7% (3,134) increase in the number of companies in significant distress from Q3 2018 to Q4 2018, but a 9% year on year increase, equating to 4,013 extra businesses.
The research data, which monitors the financial health of UK companies, also shows that thousands more companies in support services (4,245, a 4% increase), construction (2,599, a 4% increase) and professional services (1,027, a 4% increase) were plunged into significant financial distress during Q4 2018.
Ric Traynor, Executive Chairman of Begbies Traynor, said: “This Red Flag Alert research shows that while the high street has stolen the headlines, other sectors such as property and construction are facing challenging times.
“Ongoing uncertainty surrounding global trade and the risk from protectionist policies is something which will impact most businesses. Combined with a lack of clarity on a final Brexit deal, all this makes for testing times for all businesses, and reinforces the importance of monitoring the bottom line to ensure there is enough working capital to weather the storms ahead.”
The figures emphasise the need for businesses to keep a tight rein on credit control and ensure that late payment of invoices is dealt with quickly and efficiently to avoid any defaults. Firms in difficulty often juggle payments and ignore invoices from companies that don’t take swift action to ensure payment.
Please contact Neil O'Callaghan if you would like help with credit control and debt collection.