Top Service News
August Insolvency Statistics – Corporate Insolvency Remains High.
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The Insolvency Service released the latest set of statistics for August 2023 this morning, to understand what this means for you and your business please find a summary of the key points below.
Registered Company Insolvencies:
In August 2023, 2,308 registered company insolvencies were reported, this is an increase of 367 insolvencies when compared to August 2022 where 1,941 insolvencies were reported.
These figures are higher than seen both when Government measures were in place in response to the Covid-19 pandemic and pre-pandemic levels.
Among these insolvencies 221 were reported to be compulsory liquidations, representing a 45% increase in comparison to August 2022. Compulsory Liquidations have continued to climb after the pandemic partly due to the rising number of Winding-Up Petitions presented by HMRC.
However when it comes to registered company insolvency, the majority were Creditors Voluntary Liquidations (1,880), this is an increase of 13% when compared to August 2022.
Individual Insolvencies:
A total of 8536 individual insolvencies were reported to have taken place during August 2023. This is a decrease of 1,048 as 9584 individual insolvencies were reported in August 2022.
Of these individual insolvencies, 648 were bankruptcies, 2714 were debt relief orders and 5174 were reported to be Individual Voluntary Arrangements. (IVA’s).
A decrease in Individual Voluntary Arrangements can be seen when comparing August 2023 to August 2022 when around 7,340 Individual Voluntary Arrangements were reported.
Corporate insolvencies remain at elevated levels compared to both pandemic and pre-pandemic periods. In response to the above statistics, at Top Service we recommend taking the following steps to maximise the level of protection for your business:
Review Credit Management Tools and Processes:
- It’s essential for businesses to periodically assess the effectiveness of their credit management tools and processes.
- Given the elevated levels of company insolvencies, this review becomes even more critical to protect your business from potential financial risks.
- Consider adjustments to your credit assessment criteria in response to changing economic conditions.
Understand Trading Experiences:
Understanding how your current and potential customers are paying other suppliers can provide valuable insights into their financial health.
Industry specific trading experiences give you up to the minute information allowing you to make informed decisions beyond relying solely on credit limits and credit scores.
Businesses can better adapt to the current economic landscape, mitigate financial risks, and make informed credit decisions when they have the best credit management tools available to their industry. decisions when extending credit to clients.
A proactive approach to credit management is crucial in uncertain times to safeguard your company’s financial stability.