2023 has earned unwanted recognition as the most challenging year for UK businesses since 2009, in the wake of the global financial crisis.
The latest insolvency figures show that between July and September, there were 6,208 registered insolvencies across England and Wales.
A 10% year-on-year rise is troubling reading for UK business owners. At a time of high borrowing costs, rolling up of government Covid support and a slowdown in demand, the odds have been firmly stacked against UK businesses throughout 2023.
As the difficult year draws to a close, business leaders who have navigated the financial headwinds can be buoyed by a brighter outlook for 2024 as technology is set to offer further relief for businesses and stem the rising trend of company insolvencies.
Lynne Darcey Quigley, CEO and founder of Know-it, said, “There’s been no shying away from just how difficult this year has been for business owners. Although insolvencies have risen, signs of promise, such as the recent fall in inflation, will be positive news for many as we look towards the new year.
“Business owners will welcome the fall in inflation, but hurdles remain in the way before the threat of insolvencies can be mitigated. High interest rates continue to restrict many businesses (particularly SMEs) from accessing the cash they require, at a time when cash flow is crucial to business survival.
“Looking ahead to 2024, technology will have an important role to play in helping businesses. Manual processes and human error often lead to companies losing out on both time and money – commodities which business leaders cannot afford to lose cheaply.
“Struggling businesses will struggle to part ways with capital during fiscal hardship. It is always important to look at the big picture. Business owners who identify areas of their organisation that require advancement will have a clearer idea of what solutions can help them. Replacing historically manual processes such as credit control with cloud-based, end-to-end solutions will plug both financial and time-consuming outflows a business may be experiencing.
“Placing technology at the centre of business strategy in 2024 will prevent the insolvency rates from reaching the highs we witnessed in 2023. External economic factors such as interest rates and inflation remain a mixed bag, meaning business owners must be proactive when protecting themselves against the challenging conditions they continually face.”
Recent research from Goldman Sachs predicts a brighter outlook for the UK economy and its business community in 2024. It is estimated that the economy will expand above expectations, and interest rates and inflation pressures are expected to decline too.
Lynne concludes: “2023 will be remembered for the wrong reasons across the UK business community. But we continue to move further away from the financial hangover of the global pandemic, and signs of economic green shoots are beginning to appear. This and the rapid technological advancement to help businesses secure their future will provide positive signs as we head into the new year.
To avoid becoming next year’s insolvency statistic, businesses must secure cash flow and ensure they are no longer operating via outdated and costly manual processes. 2024 will be a pivotal year for technology and business strategy to go hand-in-hand to ensure we avoid repeating the damage we saw inflicted on the UK business community in 2023.