According to Begbies Traynor, 2015 saw that 17% of firms in the UK ended their year in “significant” financial distress. In the last quarter of 2015, 268,898 businesses in the UK reported that they experienced a financial problem, compared with 229,232 during the same quarter in 2014.
The report that is carried out tracks areas such as;
- Retained profits
- Net worth
Partner at Begbies Traynor, Julie Palmer has said;
“Despite an improving economy, 2015 showed no shortage of challenges for UK businesses, with a slowdown in China and collapsing oil and commodity prices leading to stock market turmoil during the second half of the year. At the same time, manufacturers weakened significantly as a result of continued sluggish growth in Europe, while labour shortages and building materials inflation continued to plague the construction sector.
“With so many companies beginning the New Year in an unfavourable financial state and even the chancellor predicting black clouds on the horizon, 2016 looks set to be another challenging twelve months for UK corporates.”
Every business sector has reported an increase in financial distresses, which is led by businesses in the service sector – 58,955 (19%) were affected and 12,418 (18%) manufacturers said goodbye to 2015 in an extremely poor financial state. 41,373 (18%) of consumer businesses have also seen a financial struggle, and 50,122 (17% increase from 2014) of those in construction and real estate were too in a severe financial difficulty by the end of 2015.
Head of Businesscomparison.com. Philip Brennan has said;
“It is crucial for businesses to plan their finances. Before they do anything, they need to know what is coming into their account, what is going out of their account and when it is happening, this will allow businesses to plan their spending in advance. This is crucial whether that is taking on more staff, buying new equipment or even their tax payments which will soon change to quarterly for small businesses rather than annually. Businesscomparison.com offers a wide range of comparison journeys which helps businesses save money.”