The recent official figures for the first quarter of 2011 show:
- the economy grew by 0.5%
- unemployment fell by 36,000
Compared to the same period last year:
- Compulsory Liquidations and Creditors’ Voluntary Liquidations increased by 2%
- Other corporate insolvencies (Administrations, Receiverships and Company Voluntary Arrangements) decreased by 2%
- Individual insolvencies decreased by 16%
Added to this, there have been reports in the press of Insolvency practices issuing profit warnings.
So, does all this mean that we are out of the woods now?
I don’t think so, and nor do any of the Accountants and Business Advisors I’ve spoken to recently. There is still a long way to go.
So, more than ever, cash is king ~ especially in the struggling sectors like retail, construction and restaurants (who are the latest to be under the HMRC spotlight).
Another point worth mentioning is Company Voluntary Arrangements, which are getting quite a bit of press coverage. These can be a great solution for a company with cashflow problems. However, with a (remarkable) reported estimated failure rate of about 60%, they do need to be considered with great care.
If we can help you / any of your clients regarding any of the above matters, please do give me a call.