A leading restructuring expert has pleaded with the management teams of ailing businesses to react quicker to signs of financial distress, as compulsory liquidations continue at a rate of almost double.

The plea comes as latest monthly insolvency statistics for England and Wales reveal there were 248 compulsory liquidations in July 2023, 81% higher than in July 2022.

This despite the total number of registered company insolvencies in July 2023 (1,727) being lower than in the same month in the previous year (1,831 in July 2022).

Colin Haig (pictured above), head of restructuring with UK top ten accountancy firm Azets, says the high level of liquidations should have alarm bells ringing.

He commented: “Liquidations have continued at a rate of almost double throughout 2023. The long-term trend in business failures will continue to tick upwards despite the total number of insolvencies dipping last month – but most concerning is the number of compulsory liquidations.

Liquidation is an end-of-life process and too many business owners are failing to react quickly enough to signs of distress, leaving them unable to take advantage of more constructive options.”

He added: “My advice to businesses is to face up to problems before an insolvent liquidation becomes the only option, and while capital is still available.

An uptick in administrations is a much better sign of the UK’s economic resilience than an uptick in compulsory liquidations. The latter results in a total closure and loss of all jobs.”