The Five Things Keeping Directors Up at Night: Insolvency

2,230 businesses went insolvent in the UK last month alone. Construction was hit hardest, followed closely by hospitality and retail.

Here is what is easy to miss. It is rarely the business itself that is badly run. More often it is one bad debt, one client going under, one contract collapsing, and the ripple hits everyone downstream who was relying on that money landing on time. One domino falls. Several others follow. And the businesses caught in the middle did nothing wrong except trust the wrong client for too long.

If you are in construction, retail or hospitality, or if you supply into those sectors, you are statistically closer to this than most right now. Not because you are doing anything wrong. Because of who you are trading with.

So here are a few honest questions worth sitting with today.

Have you actually got bad debt protection in place, or is it still on the list of things to sort out? Because the list does not protect you when a client goes under.

When a client runs past 45 days, are you being notified personally by your accounts team? Not a spreadsheet sitting somewhere nobody looks at. A direct notification to you, the person who actually needs to know.

And is every client whose debt is creeping up being monitored by a credit reference agency right now? Are they paying everyone else late too? That single piece of information can tell you whether you are about to become the last one paid before something much worse happens.

When you let a client run up a debt, you are acting as their bank. So act like a banker would. Check the numbers. Watch the signals. And protect yourself before the ripple reaches you.

I have written a book on exactly this, protecting yourself, protecting your income, protecting your family, so you never have that bad day. It lands in a few days and I will let you know the moment it does.