70,000 businesses advised about finance by Insolvency profession in 2013-14, reveal R3

Share Article

A study by business recovery experts at R3 has revealed that in 2013-14, the UK’s insolvency profession advised 70,000 businesses about their finances, indicating that a substantial number of companies across the country were unable to control the finances going in and out of their business. Insolvency specialists at Corporate Recovery Help offer commentary on this new report.

They claim that businesses are unable to control their spending due to poorly devised budgets and that controlled spending can only be accomplished with a yearly budget in place that covers expenses for all areas of the company as well as the fall back expenses which may be required if there are different payment issues with suppliers and clients. However, if these areas are not covered then the risk of insolvency is substantially higher.

They were one of the many insolvency specialists who were responsible for saving a remarkable 41% of insolvent businesses in 2013-2014. They’ve claimed that new start-up businesses are more prone to insolvency than others due to factors such as unexpected growth or an amateurish business model, which can also be very disruptive when it comes to organising your finances.

Speaking about budget strategy, Corporate Recovery Help’s http://www.corporaterecoveryhelp.co.uk/ senior business rescue consultant Ivan Lavelle said, ““In any business, large or small, the key thing is to create a realistic budget and stick to it, making sure that all bills, being suppliers, taxes etc. can be paid as and when they fall due, hopefully, when all is done, with a surplus as profit. A business budget must be realistic and achievable and is based on all known variables, which can be fine-tuned over time"

Forecasting income in different areas of the business plays a major part in creating your budget for the year. They’ve suggested that money spent in previous years plays a major role when it came to creating the budget for the following year, however, changes to a business model, which is very common for businesses that have suffered unexpected cash flow problems, will result in companies taking a more conservative approach to forecasting.

It’s not surprising to discover that most companies open themselves up for failure when they’re unable to prioritise their investments and set money aside for growth. Corporate Recovery Help claim that businesses look to grow too quickly and take on more employees than they can afford too in order of dealing with a greater working demand. This resulted in the insolvency profession having to save around 230,000 jobs in 2013-14, which was revealed in the statistics released by R3 http://www.r3.org.uk. These statistics were unveiled in R3’s Value of Insolvency Profession Report 2015 (https://www.r3.org.uk/media/documents/about_us/insolvency_industry/R3%20Value%20of%20Profession.pdf) which was published in May of this year.

Research costs are regarded by the insolvency specialists as one of the most essential areas of budget planning for any business. Start-up businesses that are new to an industry will have to conduct more thorough research than others, including finding the costs for phone and internet bills, rent, salary costs, potential legal fees and office supplies.

Speaking about the different stages of budget creation, Ivan Lavelle added, “It’s important that each stage of the budget strategy is intricately thought out and that there is money left aside for potential pricing adjustments for both seasonality and unreliable payers. It’s also worth trying to agree fixed, one-off payments with your suppliers to ensure that price adjustments on their services don’t affect your agreement.”

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Emma Gibson
Custard Media
+44 1772425951
Email >
Visit website