Bottomed out: Insolvencies rising in uncertain financial markets
“The UK markets are under more pressure since Brexit, make sure your invoice gets paid.” – Ramon van Viegen, CFO, Onguard.
Recently, the status of businesses across the globe has started to change. This is especially evident in UK industries. The press reports that the UK is set for one of the world’s highest rates of insolvencies. Many businesses are simply failing and going insolvent. With this number on the rise, it is important to gauge what the catalyst behind these failures is. Is it down to post-Brexit panic or simply poor credit management and borrowing practices?
As Brexit negotiations continue, there are increasing concerns over the financial impact this will have on the UK. The Financial Times has reported that insolvencies rose by 13% in the first quarter of 2018 alone. Ripples of this rise can also be found in statistics relating to trade credit unions, who are currently paying out £4m per week in insurance claims.
It is increasingly clear that the UK fall far behind the Nordics in certain technologies around finance and payments. In general, we regard the Nordics as one of the fastest payers in the world. This is definitely a factor in the lower insolvency rate across these countries than of those seen across the EU.
Debts are rising, this isn’t a localised problem and is again, evidenced across the globe. Naturally, this rise in debts will be accompanied by insolvencies. Bad borrowing or borrowing beyond the companies means negatively affects a company and could lead to their dissolution.
How to help in the current economy
There isn’t anything specific companies can do to completely stop or slow the rate of insolvencies across the UK, as the factors are far out of anyone’s control. However, there are things that can be done to help, and in turn, help restore consumer’s faith in the uncertain economy.
Communication with your customers is vital and this is the number one priority in all of Onguard’s financial products. Our software can segment customers and help guide businesses as to when and what kind of support a customer may need. However, communication with customers is still required to work optimally. Your communication with your customer will help to ascertain as to whether they are an at-risk business or simply late on a payment. It will also help to ensure that your invoice is always at the top of the pile. Should anything go wrong, even partial payment of an invoice is better than nothing, as claiming from an insolvency practitioner is a time-consuming hassle.
So, whilst the financial markets remain uncertain, and the true impacts of Brexit are still yet to arise, it is possible to keep your business financially stable. Constant communication is key and implementing the right financial software from Onguard can enable you to accurately stay on top of this.