Companies are being warned to regularly monitor the state of their customers’ finances if they are to avoid being caught on the hop should they hit financial problems.

The warning from specialist credit referencing company ICSM Credit comes following the grim news that the second quarter of 2018 proved another bad one for businesses, with company liquidations leaping by 23% over the same period of 2017 – with retail and construction the two sectors most under pressure.

New year-on-year figures from Dun & Bradstreet show that in the three months to June a total of 4,148 businesses shut up shop. The equivalent Q2 figure for 2017 was 3,372.

Retail Trade liquidations recorded a rise in Q2 of 23.5% on the previous quarter alone, while the year-on-year total retail insolvencies increased by 36.7%. Overall, 688 construction companies liquidated in Q2.

D&B’s new statistics confirm the upward trend identified in the Government’s own most recent figures: their breakdown shows a total of 3,918 companies entering insolvency in Q2 2018, comprising 2,731 creditors’ voluntary liquidations (69.7% of all insolvencies), 752 compulsory liquidations (19.2%) and 435 other insolvencies (11.1%).

When compared to the same quarter last year, total company insolvencies increased by 12.0% and the underlying number of insolvencies increased by 12.6%.

The number of CVLs in Q2 2018 was 2,731, a decrease of 0.5% on Q1 2018, but rose by 14.6% compared with Q2 2017.

Excluding bulk insolvencies, the construction industry had the highest number of insolvencies in the 12 months ending Q2 2018, followed by the wholesale and retail trade and repair of vehicles industrial grouping.

Total individual insolvencies in Q2 2018 were 4.4% higher than in the previous quarter, and 27.3% higher than in the same quarter the previous year. This continues the increasing trend observed since 2015 and was the highest quarterly total since Q1 2012.

“Whichever way you look at the figures,” says Ian Carrotte, Proprietor of specialist credit referencing company ICSM Credit, “trading conditions are continuing to be very tough – and many companies are really feeling the strain, including a lot of well-established businesses.

“This makes it critical for suppliers not only to check out new customers… but also to keep tabs on their long-standing ones. These are the companies that you can often be heavily dependent upon – and allow to extend their credit terms.

“The subscription service we provide to thousands of businesses allows you to make on-going credit checks which will give you early warnings of a creditor who is starting to struggle.”