The received wisdom is that whilst debtor days are rising only slightly for most businesses, problem debts are on the increase. It is no great surprise, therefore, that a recent survey revealed that in the second quarter of 2018 one in four businesses had significant financial pressure brought on by the insolvency of a customer.
The first quarter of the year is often a particularly difficult period for many industries, including building, hospitality and retailing, with slowing sales the norm. This year the very poor weather at the beginning of the year exacerbated the effect…especially following the collapses of companies such as Toys R Us and Carillion, the latter leaving many supplier firms in difficulties. Insolvencies were 12 per cent higher in the first quarter than in the second quarter of 2018. More worryingly, however, the second quarter insolvency numbers were up 12 per cent compared with the same quarter last year.
After the building industry, the transport and wholesale sectors are the most affected by customer insolvency.
There are a variety of measures you can take to protect your business from the financial instability of another, be it through terms of trade or action to collect delinquent debts. If you need guidance on the most appropriate steps to take to protect your business interests, please contact our Insolvency team on 020 7822 4000, or email firstname.lastname@example.org