1 March 2010

Company liquidations in England and Wales fell by 2% to 4,566 in the last quarter of 2009, compared to Q3 2009(4,648). This represents a 1% decrease on the same period in 2008, where Q4 saw 4,615 company liquidations.

While these figures are encouraging, there are fears that a new government may close or scale back the current time to pay scheme(allowing businesses to make ‘time to pay arrangements’ to settle one or more taxes), which could result in a surge of company failures. With many businesses still struggling to rebuild their balance sheets and improve cashflow, many are still in a precarious position, with bank and other funding lines still proving difficult for many SMEs to access, despite bank and government assurances on levels of lending.

Businesses are therefore strongly advised to do all that they can to protect themselves from bad debts, such as proper credit checking, agreeing terms and where possible obtaining deposits up front, and ensuring tight controls and procedures when it comes to credit control.