Insolvencies on the rise

According to the Insolvency Service one in 189 UK companies has entered insolvency in last year. PwC’s analysis of the July 2025 insolvency data says that over 97% of insolvencies involve companies with annual turnover below £1 million, the vast majority of them being owner-managed.

The biggest cause of insolvency is cashflow, caused by late payments and poor internal financial management. Often, businesses that are profitable on paper are struggling to pay the bills and the payroll and the early warning signs were missed - increasing working capital, falling gross margins and customer and supplier disputes are just a few of the warning signs.

And once customers, suppliers and the bank start losing trust in the business the downward incline gets steeper and the failure is accelerated. All because the board did not get the right financial information in a timely manner or refused to accept what the book-keeper was saying.

But even a business that isn’t in financial stress needs high quality financial management and information if the owners want to grow the business or simply make more money.

If a board or business owner is not getting monthly management accounts within ten days of the month end, doesn’t look at cash forecasts and declining margins, doesn’t understand working capital, and doesn’t look at the business risks and the required mitigations, then they really need senior, experienced finance professional.

For SMEs a full-time finance professional is expensive, but many don’t realise that the same value and expertise can be provided by a fractional, or part-time, Finance Director. Owners and directors appointing a fractional FD quickly get to experience high quality finance knowledge, governance understanding and clear and easily digestible financial information that turns the business from a cash-drain into a cash-generative and financially sound business.

Experienced FDs like me can quickly spot the issues and fix them, help drive the business forward and make it financially resilient. Get in touch if you need help with your business.