The DTI’s latest insolvency figures released today, once again make bleak reading. 3,187 companies suffered liquidation in the last quarter, an increase of 8.5% on this time last year, but business rescue specialists Benedict Mackenzie say many more insolvencies can be avoided if businesses take the time to stand back and review their operations before things get to crisis point.

The biggest increase affecting companies was in compulsory liquidations, where 15.2% more companies than last year were forced into liquidation because of unpaid bills and one or more of their creditors had petitioned the Court for their company to be wound up.

The other huge rise was in personal insolvencies which saw a massive increase of 57.1% on this period last year, the inevitable backlash of people over-spending on credit without the means to pay it off.

Graham Petersen, partner in business rescue and recovery firm Benedict Mackenzie, says “The economic climate is still causing businesses a lot of trouble but sometimes crises can be averted by business owners taking a step back from their company and ensuring they are covering business basics. The three golden rules for companies facing financial difficulties are:

• to reduce costs wherever possible
• to collect in the money owed to the business and
• to manage the cash flow

It is the companies with weak cashflows that are particularly vulnerable when the economic climate is less than perfect.”

Graham advises, “Businesses don’t have to ‘go it alone’. If your business is under pressure then you should seek advice as soon as possible in order that you have the widest range of options available to you and are not necessarily forced into liquidation.”

Businesses that would like more advice on how to avoid insolvency should email info@benemack.com, visit their local Benedict Mackenzie office or log on at www.benemack.com