In November 2024, company insolvencies increased by 13% compared to October 2024 and were 12% lower than November 2023. The construction sector remains the most affected, accounting for 17% of all insolvencies in the past year. Below, we explore the updated figures and the factors shaping these trends.

🔹 November 2024 Breakdown

• Total Insolvencies: 1,966 cases (compared to 1,743 in October 2024).

🔻 Creditors’ Voluntary Liquidations (CVLs):

• 1,565 cases, up 8% from October, making up 80% of all insolvencies.
  CVLs continue to dominate as businesses struggle with financial pressures and an inability to restructure or secure funding.

📉 Compulsory Liquidations:

• 254 cases, up 37% from October.
  This sharp increase reflects intensified enforcement of debts and a growing inability for businesses to repay creditors.

🚀 Administrations:

• 132 cases, up 36% from October and 12% higher from November 2023.
  

🔽 Company Voluntary Arrangements (CVAs):

• 14 cases, up 17% from October, showing slight improvement in restructuring efforts.

🔹 Insolvency Rates & Long-Term Trends

• 12-Month Insolvency Rate: 52.9 per 10,000 companies (down from 57.3 last year).
  This equates to 1 in 189 companies entering insolvency in the past year.
• Historical Context:
  While insolvencies have risen post-pandemic, rates remain significantly below the 2008-09 recession peak of 113.1 per 10,000 companies.

🔹 Construction Sector Impact

Total Insolvencies in Construction (12 Months to November 2024): 4,264 cases, making up 17% of all company insolvencies.

• Key Challenges:
  • Cash Flow Issues: Payment delays in the supply chain continue to cripple smaller firms.

Although insolvency numbers have shown some stabilisation compared to the previous year, construction businesses remain highly vulnerable to broader economic pressures. Strategic planning and financial resilience are essential.

⚠️ Stay Proactive to Avoid Financial Distress

We invite credit management teams across industries to make the most of the tools and services we offer:

🔍 Identify Early Warning Signs: Actively monitor payment patterns and the financial health of your customers and customer customers to stay ahead of potential issues.

💡 Maximise Financial Tools: Take advantage of our services to optimise cash flow management and effectively mitigate risks.

📞 Let’s Connect:
For tailored advice on overcoming financial challenges, contact us at 01527 503990. 

In the high-stakes world of construction, where tight profit margins and complex projects are the norm, retention funds often represent a forgotten opportunity. These funds, typically 1.5% to 5% of a contract’s value, are held back by contractors to ensure work quality but can remain unclaimed for months—or even years—after a project is completed.

For construction businesses already managing stretched resources, these funds can be a lifeline for improving cash flow. Yet, as retention funds accumulate across multiple projects, they frequently fall to the bottom of the priority list, leaving businesses to face the financial consequences.

What Are Retention Funds and Why Do They Matter?

Retention funds are designed as a safety net for contractors, ensuring that any defects are addressed before final payments are made. After a project is completed, half of the retention is released, with the remainder held until the end of the maintenance period, which can stretch up to two years.

While this system helps safeguard project quality, it creates significant challenges for businesses trying to track and collect these funds. Missed retention payments can significantly impact cash flow, turning what should be a minor administrative task into a costly oversight.

The Hidden Cost of Overlooked Retention

Unclaimed retention funds may seem insignificant in isolation, but when added up across projects, they can make or break a company’s financial health. Businesses that fail to prioritise retention management risk:

• Weakened Cash Flow: Delays in retention collection can leave companies without the liquidity needed to fund future projects.
• Missed Revenue Opportunities: Retention often represents untapped income.
• Increased Administrative Strain: The longer funds go unclaimed, the harder they are to recover, adding unnecessary complexity to collection efforts.

Best Practices for Managing Retention Funds

Proactive management is the key to turning retention funds from a financial headache into a reliable source of revenue. Industry experts recommend:

1. Establishing a Tracking System:
   Create a centralised database or spreadsheet to monitor each project’s retention percentage, release dates, and follow-up actions. Automated reminders can help ensure no payment is missed.
2. Standardising Documentation:
   Ensure contracts clearly outline retention terms and that all related documentation—such as invoices and completion certificates—are easy to access when needed.
3. Maintaining Communication:
   Proactive communication with contractors is essential. Sending reminders ahead of retention release dates helps ensure timely payments.
4. Engaging a Specialist:
   For businesses without the resources to manage retention in-house, working with a specialist service can simplify the process. Many experts offer risk-free models, only taking a commission when funds are successfully recovered.

Specialist Services: A Risk-Free Solution

How a Specialist Service Can Help

Our No Collection, No Fee recovery service removes the financial risk and hassle associated with retention collection. We handle the entire process with a clear, structured approach—allowing you to focus on core operations.

Benefits of Working with a Retention Specialist:

No Upfront Costs: We only take a commission upon successful recovery of funds.

Increased Revenue: Ensure all due funds are collected and reinvested in your business.

Improved Cash Flow: Receive collections faster, improving operational flexibility.

Turning Challenges Into Opportunities

Retention funds are an often-overlooked asset in the construction industry, but with the right approach, they can transform financial outcomes. By prioritising retention management—whether through in-house strategies or specialist services—construction firms can unlock significant revenue and strengthen their financial position.

The question isn’t whether retention matters; it’s how much unclaimed funds are costing your business. Now is the time to act.

For more insights on retention management and recovery strategies, contact a member of our team to find out more.

Is your business overlooking overdue retention payments? Cashflow is the lifeline of any business—big or small.

Take a look at our latest video in which Non-Executive Director Philip King FCICM chats with Laura Humphries, Head of Customer Development, about how cashflow should be the number one priority for businesses and how retention can help with this.

At Top Service, we’ve helped members recover substantial retention payments, turning lost money into vital cashflow.

💬 As Philip says:
“Turnover is vanity, profit is sanity, but cash is reality.”

To learn more about how we can help you minimise risk and maximise cash flow, call in to speak with one of our experts today on  01527 518800.

Top Service CEO, Emma Reilly FCICM says:

“The new fair payment code introduced by the small business commissioner is a welcome initiative for the UK construction industry, potentially addressing the persistent issue of late payments to suppliers. However, its effectiveness may be limited without statutory backing.

In the construction sector, where large contractors often dictate payment terms, a legally binding requirement could significantly improve payment practices. The success of this initiative will largely depend on:

💡 Widespread awareness of the initiative.

💡 Integration into risk assessments by businesses who are able and

government departments when evaluating tenders

While the code is a step in the right direction, making it a legal obligation could truly transform payment culture in the UK construction industry, benefiting smaller subcontractors and suppliers who frequently bear the brunt of late payments.”

Emma continued “It has been my pleasure this morning to register Top Service’s interest in applying for the Gold Award”.

You can read more about the New Fair Payment Code here: https://www.smallbusinesscommissioner.gov.uk/new-fair-payment-code/

Emma Reilly, FCICM, CEO of Top Service Ltd and a renowned credit expert, shares insights on the success of recent webinars and invites your suggestions for future topics. She also highlights the importance of staying informed about customer performance, especially in light of the recent ISG collapse, and how Top Service can support you in managing these risks.

In October 2024, company insolvencies dropped by 10% compared to September 2024, and were 24% lower than October 2023. However, insolvencies remain significantly higher than pre-pandemic levels, reflecting ongoing economic challenges.

October 2024 Breakdown:

Total Insolvencies: 1,747 (compared to 1,950 in September 2024)

🔻 Creditors’ Voluntary Liquidations (CVLs):
1445 cases, down 7% from last month, 83% of all insolvencies.

 CVLs remain the dominant form of insolvency, reflecting ongoing financial challenges for businesses unable to restructure or secure financing.

📉 Compulsory Liquidations:
188 cases, reflecting a 14% drop from September

🚀 Administrations:
100 cases, Administrations saw the sharpest decline with numbers falling by 35% from September and 28% from October 2023.

🔽 Company Voluntary Arrangements (CVAs):
12 cases, down 29% from September

Insolvency Rates & Long-Term Trends:

12-month insolvency rate: 53.8 per 10,000 companies, down from 56.5 last year.

This translates to 1 in 186 companies entering insolvency over the past year

Although rates have risen since pandemic lows, they remain well below the 2008-09 recession peak of 113.1 per 10,000.

Construction Sector Impact:

The construction industry remains the most affected, with 4,264 insolvencies in the 12 months leading to September 2024, accounting for 17% of all cases.

This reinforces the vulnerability of construction businesses to cash flow issues, material price volatility, and market uncertainty.

📈 While insolvency numbers show month-to-month improvement, the construction sector must remain vigilant against broader economic pressures. Planning and resilience are key.

⚠️ Staying Ahead of Early Warning Signs ⚠️

We encourage all credit management teams across industry to stay vigilant and monitor early warning signs of financial distress. Having the right tools and insights can help minimise debt and maximise cash flow.

📞 Get in Touch
To learn how we can help your business, call us today to speak with one of our experts on 01527 503990. Let’s work together to navigate these uncertain times.

If your address has been used as a company’s registered office without your consent, there are clear steps in place to address this issue, thanks to the Companies (Address of Registered Office) Regulations 2016, effective since 6 April 2016.

This default address is used in cases where an address may have been listed without proper consent. Prior to these regulatory changes, individuals whose addresses were used without permission had little recourse for removing them from company filings, which often resulted in receiving unsolicited mail, visits from debt collectors, and even potential credit issues.

Rules to Prevent Unauthorised Address Use:

• Who Can Apply: Anyone can now request that Companies House change a company’s registered address if it’s being used without authorisation.
• Registrar’s Process: The Registrar will notify the company of the application and allow at least 28 days for the company to respond, prove authorisation, or update the address.
• Default Address: If no response or proof is provided, the Registrar will change the registered office to Companies House’s default address:
  PO Box 4385, Cardiff, CF14 8LH

How This Helps You: This procedure provides a quicker, simpler remedy to prevent unauthorised use of private addresses. Importantly, mail sent to the default address will not be opened by Companies House and will be destroyed after 12 months if unclaimed.

For further details on these regulatory changes, see The Gazette’s article on this update here.

Understanding Trading Experiences in Construction Credit.

In the world of construction, making informed credit decisions is crucial. Businesses need to rely on timely and accurate information to safeguard themselves against financial risks. Top Service’s trading experiences play a pivotal role in this process, providing companies with the detailed insights necessary to evaluate potential credit extensions.

Our industry specific trading experiences provide a real time and up to date picture of how a subject company is paying its other suppliers right now.

Sometimes, insolvency proceedings can seem to come out of the blue, when referring to more generic credit information. Whilst it’s correct that there are not always a string of CCJ’s, poor accounting figures, or a mass exit of Directors there are always trade creditors.

The Importance of Shared Information Credit Risk Management

What are the benefits of sharing payment data & trading experiences:

1. Improved risk assessment: allows businesses to better evaluate the creditworthiness of potential customers, helping them make more informed decisions about extending credit or setting credit limits.

2. Enhanced due diligence: more thorough background checks on potential customers, reducing the risk of fraud or non-payment.

3. Better cash flow management: By understanding the payment patterns of potential customers, businesses can more accurately forecast cash flow and plan accordingly.

4. Early warning system: Shared data can help identify potential payment issues or deteriorating financial health of customers before they become serious problems.

5. Reduced bad debt: By making more informed credit decisions, businesses can potentially reduce instances of bad debt and associated losses.

6. Improved efficiency: Shared payment data can streamline credit approval processes, saving time and resources in customer onboarding.

Examples of Trading Experiences Preventing Financial Losses

The real-world impact of sharing trading experiences in numerous cases where businesses have avoided significant financial losses. Consider this example:

Top Service received a call from a worried member about a suspicious credit application they received, we discovered that someone might be impersonating John Sisk & Son Limited. Thanks to our Credit Management Expert Sally’s thorough investigation, we quickly informed our members, prompting an immediate and effective response.

Following the sharing of this information, we received a heartfelt thank-you from another one of our members, who was approached for a suspicious £80k application. With our information, she confirmed it was a fraudulent application and avoided a major loss!

This incident highlights the critical role of sharing trading experiences in identifying and preventing scams. It showcases the effectiveness of having a community of informed members who can quickly verify and alert others to potential threats. Such examples underscore the importance of staying connected and informed within the industry, proving that these trading experiences are not just a luxury but a necessity for protecting business interests.

In conclusion, the role of trading experiences in the construction industry is more critical than ever. As businesses strive to navigate the complexities of credit risk management, having access to timely and accurate information is essential.

Emma Reilly, FCICM, CEO of Top Service Ltd and a renowned credit expert, expresses her delight in announcing that Top Service has successfully recovered over £100 million for its members. This achievement highlights the effectiveness of the comprehensive range of debt recovery services the company provides.

Over the past two decades, Rachel has not only witnessed significant growth within the company but has also experienced personal and professional development. In her reflection, Rachel shares insights into her journey at Top Service and highlights some of the most notable achievements of our members.

We’d like to take this opportunity to thank Rachel for her incredible 20 years of service and for everything she does for Top Service and our members.