Figures from The Insolvency Service show that corporate insolvencies increased last year to their highest level since 2014. If you have unpaid invoices from a client it’s important not to leave them too long or you run the risk of the business becoming insolvent.
2018 Corporate Insolvencies
The latest statistics show that, compared with 2017, all types of company insolvencies increased, apart from administrative receivership. The underlying number of corporate insolvencies rose to 16,090, which is the highest for four years. This is a 10% increase from 2017.
The most common form of company insolvency last year were CVLs (creditors voluntary liquidations), which accounted for over 69% of the total (11,152). There were also 3,117 company liquidations, 1,464 administrations, 356 CVAs (company voluntary arrangements) and 1 receivership.
Construction and Retail sectors hit hardest
Last year the retail and construction sectors suffered the hardest from insolvencies.
The construction industry had the highest number of new company insolvencies in 2018, with 2,954. This was down 0.5% from the previous 12 months.
The wholesale and retail trade and repair of vehicles group saw the second largest number of insolvencies in 2018. There were 2,303 new company insolvencies in the 12 months up to Q3 2018, which was a 0.6% rise from the last 12 months.
How can I recover unpaid invoices?
These figures highlight the importance of keeping your cash flow on track and not allowing customers to build up large debts. Even with well-known businesses, there is the risk that they could become insolvent.
At CEA we can support your accounts department to help you chase overdue invoices. Debtors can be encouraged to make a payment when you’ve escalated the situation through a third party.
It can also be easier to arrange for payment of the invoices or to set up a recurring payment before the debt becomes unmanageable. Once a company gets into financial difficulties it can be harder to get a large payment in one lump sum.
If you leave the situation too long and the company goes into administration it will be unlikely that you’ll get any money back. Make sure you act swiftly to prevent this happening and ensure that your business remains financially stable.
Contact us today to see how we can help with unpaid invoices. For B2B debts (invoiced to limited companies, plcs and partnerships) any work we carry out in the pre-judgement stage is free of charge to creditors.