It’s still an uncertain time for many businesses. Due to a variety of factors, like the pandemic, changes in consumer behaviour, and supply shortages, many businesses are struggling to keep afloat. By monitoring the latest information from The Insolvency Service, we’re able to stay up to date on the latest economic challenges.
The figures
The Insolvency Service recently released figures indicating a further 19% increase in business insolvencies in England and Wales, compared to the previous month.
In June 2021, the number of registered company insolvencies was 1,207 – 63% higher than the number registered in the previous year (741 in June 2020).
However, this is 18% lower than the number registered two years previously before the pandemic: 1,466 in June 2019.
The overall reduction in company insolvencies has almost certainly been hit by the restrictions on winding up petitions, giving a much lower number compared to compulsory liquidations.
Creditors’ Voluntary Liquidations (CVLs) for the quarter stood at 1,116 which is a return to pre-pandemic numbers.
The impact
We are starting to see an increase in corporate cases with insolvency reports detailing a variety of reasons for business failure. Top of the list is the easing of government support. Ultimately though, managing cash flow is important as in many cases cash at the bank is too low for the company to be deemed solvent.
Directors who have fought off the inevitable and are now looking to the CVL process to close their business but at what cost? The creditors of course!
On the 30th of September 2021, we will see an end to restrictions on the use of the winding-up process. It will be interesting to see how brave credit teams will be when it comes to pursuing debts they have had sitting on their ledger for the past 12-15 months.
Time will tell, however, the tsunami of business failures might just be arriving soon…
How Beeston Shenton Can Help
We have a wealth of knowledge and expertise in debt recovery steps to aid your business. Providing a considered approach to speed up debt recovery collections whilst minimising customer conflict and reducing the risk to your business.
Our service is tailored to match the individual needs of your business and we pride ourselves in offering bespoke, cost-effective solutions to your debt recovery needs. We help by simply chasing late payers to also dealing with legal proceedings including all county court and insolvency processes.
We are totally dedicated to helping our clients improve cash flow and increase the profitability of their businesses and we use the latest in Debt Recovery software enabling us to process both pre-legal and legal collections promptly and efficiently.
About the author
Iain Bould is the head of our Commercial Litigation department.
Iain has over 28 years of experience in Commercial Debt Recovery having worked in both Private Practice and Industry and brings a pragmatic and commercial approach to recovering debts. With extensive experience working across all industry sectors, Iain has particular expertise in working with Insolvency Practitioners in advising and recovering outstanding insolvent company ledgers.
If you need any advice or further information please contact Iain at iain.bould@beestonshenton.co.uk
