Specialist in business recovery and restructuring Begbies Traynor is enabling print and packaging companies to access financial information about customers, competitors and potential new clients by subscribing to its Red Flag Alert system that constantly updates records on UK businesses to measure levels of corporate and financial distress.
Until now the system, which covers sales, credit control, collection, risk and compliance, has been used as an internal resource and a source of media information. With the commercial launch it becomes available as an online annual subscription service supported by a dedicated helpdesk.
A bespoke ‘health rating’ system helps businesses identify bad payers and thus reduce risks to operating cash flow, says the company.
Recent Red Flag statistics indicated that the worst for insolvencies is yet to come, with approximately 130,000 UK companies showing significant signs of financial distress in the third quarter of 2009.
According to Red Flag Alert, 1,916 companies in the print and packaging sector were experiencing ‘significant problems’ in the third quarter of 2009, and 77 companies were experiencing ‘critical problems’.
Nick Hood, partner at Begbies Traynor said: "The print and packaging sector has had a tough recession, reflecting not just the usual slashing of discretionary expenditure by customers but much deeper and more fundamental cost cutting. Despite this, there remains too much capacity and margins are painfully thin. Recent nightmare predictions of carnage across the industry are overstated, but 2010 and through into 2011 will see many insolvencies, mostly driven by the difficulty in raising the extra working capital needed to fund growing order books as and when the recovery finally takes hold.”
