Bottomed Out: Insolvencies Rising in Uncertain Financial Markets
The UK markets are under more pressure since Brexit, make sure your invoice gets paid says
Recently, the status of businesses across the globe has started to change. This is especially evident in UK industries, where the press has expressed that they are set for one of the world’s highest rates of insolvencies. Many businesses are simply failing and going insolvent and with this number increasing it is important to gauge what the catalyst behind these failures are. 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. This impact can already be seen in a recent report published by The Financial Times which states that insolvencies in the first quarter of 2018 alone, rose by 13%. 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 becoming increasingly clear that the UK falls far behind the Nordics regarding certain finance and payment technologies. It certainly feels a lot faster and easier to make payments between businesses in the Nordic industries than in the UK. In general, the Nordics are regarded as one of the fastest payers in the world. As a result, insolvency rate across these countries tend to be lower than of those seen in other parts of the EU.
Debts are rising. This is not a localised problem. Naturally, this rise in debts will be accompanied by insolvencies. “Bad” borrowing or borrowing beyond the companies means will negatively affect a company and could see them dissolve.
How to Help in this Current Economy
Companies cannot prevent or slow down the rate of insolvencies across the UK, as the factors are far out of anyone’s control. However, there are certain measures that can be taken to help, and in turn help restore consumer faith in this uncertain economy.
Firstly, it is vital to communicate with your customers. This is the number one priority in all Onguard’s financial products. Whilst our software can segment customers and help guide a business as to when and what kind of support a customer may need, communication with customers is still required to work optimally. Your communication with your customer will help to ascertain 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, a partial payment is better than nothing. Especially when having to claim from an insolvency practitioner is a time-consuming hassle.
So, whilst the financial markets remain uncertain, and the true impact of Brexit remains to be seen, there are steps to take to minimize risk and 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.