Why should I accept a Company Voluntary Agreement?
by Rory Traynor
Red Flag Alert’s industry-leading data provides up to 16 months’ notice, with an average of 110 days, before an insolvency takes place.
In contrast to the last-minute nature of how insolvency is declared, these accurate predictions are paving the way for businesses to protect themselves from the impact, with months to spare.
By making use of the comprehensive monitoring tools, companies can keep a close eye on the organisations they do business with, spotting insolvency warnings long before the risk grows.
Without this forewarning, businesses are presented with huge risk, as bad debt can quickly snowball into serious complications.
In fact, businesses who are impacted by bad debt from insolvency are three times more likely to go insolvent themselves within the year. Red Flag Alert automatically monitors users’ specified businesses, scanning for predictors of insolvency and issuing relevant alerts.
By providing an average of 110 days warning, Red Flag Alert users are automatically made aware of concerns, giving them months of time to mitigate risk and action plans to bolster protection from bad debt.
It is almost impossible to avoid bad debt as a whole. However, with enough data, a more accurate forecast can be produced. Red Flag Alert’s ground-breaking business data aggregation methods have given way to some of the UK’s most advanced insolvency predictions.
Red Flag Alert's revolutionary capability to provide over a year of insolvency forewarning is a game-changer for businesses facing the ominous threat of financial collapse.
Why is Forewarning of Insolvency Important?
Providing as much warning as possible before insolvency strikes has been a fundamental aim that has guided Red Flag Alert’s data development. The importance of prediction cannot be understated, as the earlier the warning, the more doors open for businesses to mitigate their vulnerability and coinciding risk.
As soon as company declares its insolvency, there is already no time for its creditors to call in their debts, or for partners to secure last minute stock or supplies.
The process is so immediate, that the filings do not have to be submitted yet for a company to be treated as insolvent. Once its taken effect, creditors are immediately greeted by a brick wall, as laws dictate no legal action can be taken against a company as it is handled by a liquidator.
Even as the process moves along, unsecured creditors are at the bottom of the priority list for the liquidator handling the assets, leaving most businesses with bad debt and an increased risk of insolvency themselves.
With no time, no warning, and no actionable steps to take to recover debts, businesses are left in the lurch.
Finding out about a bad debt and having no time to react is not an acceptable situation. Our mission at Red Flag Alert is to ensure that businesses are not alerted as early as possible and therefore more protected, but are also able to avoid bad debt altogether.
For our team, we believe the earlier the warning, the better, so why are businesses settling for less when Red Flag Alert offers over a year of pre-warning?
Red Flag Alert’s Insolvency Prediction Breakdown
To give businesses a better chance at survival, Red Flag Alert alerts users to potential insolvencies 35 times quicker than the average seven-day notice.
Our specialists have revealed exactly how advanced Red Flag’s insolvency warnings were, illustrated by the average days it took for our system to score a business one red flag rating to insolvency.
Breaking it down by the industries that experienced the most insolvencies in the last 30 days, discover how much warning Red Flag Alert users had to take action in the face of insolvency:
- Construction - 186 insolvencies with 188 days' notice.
- Accommodation and Food Service Activities - 168 insolvencies with 199 days’ notice.
- Wholesale and Retail Trade; Repair of Motor Vehicles and Motorcycles - 154 insolvencies with 216 days’ notice.
- Administrative and Support Service Activities - 136 insolvencies with 195 days’ notice.
- Professional, Scientific, and Technical Activities - 135 insolvencies with 181 days’ notice.
- Real Estate Activities - 84 insolvencies with 246 days’ notice.
- Manufacturing - 83 insolvencies with 221 days’ notice.
- Information and Communication - 75 insolvencies with 253 days’ notice.
- Other Service Activities - 51 insolvencies with 243 days’ notice.
- Financial and Insurance Activities - 49 insolvencies with 165 days’ notice.
On average, Red Flag Alert provided 110 days’ notice for the ten industries that faced the most insolvencies in the last 30 days.
However, the most advanced warnings our users were provided were for the waste management industry, with a staggering 16 months’ notice in advance of insolvencies in this sector.
Insolvency forewarning emerges as a crucial tool. Beyond observing a company's financial health, the practice also involves timely assessments that can be instrumental in avoiding potential financial pitfalls.
Company monitoring opens up the opportunity to scrutinise creditworthiness, allowing for businesses to shield themselves from the looming threat of bad debt. In turn, insolvency prediction becomes a strategic tool, enabling stakeholders to anticipate and mitigate risks effectively.
The power lies not only in foreseeing financial distress but in taking decisive actions to avoid entanglements with companies on the brink. By looking closely at how creditworthy a company is, businesses can protect themselves, make smart choices, and keep their money safe from potentially unreliable companies.
Red Flag Alert: Your Key to Proactive Business Resilience
With insolvency comes bad debt, and companies facing bad debt are three times more likely to go insolvent themselves, within a year. Red Flag Alert has reshaped the landscape for businesses to manage the intricacies surrounding financial stability.
With an impressive average of 110 days of pre-warning, the standout services easily surpass other insolvency insight providers. This speed is essential if businesses are to be protected from risk and instead have the confidence and clarity needed to grow.
A key differentiator in our arsenal is the integration of fully customisable, actionable alerts seamlessly embedded within user portfolios. These alerts are a fundamental part of the speed behind the data. Serving as a proactive shield, businesses can quickly adapt strategies, optimise operations, and make informed decisions well in advance.
In the fast-evolving landscape of insolvency prediction, Red Flag Alert offers a strategic advantage that goes beyond conventional norms. Empower your business with foresight and resilience – choose Red Flag Alert for a future where informed decisions pave the way to enduring success.
Red Flag Alert’s Countdown to Insolvency - Turn Data Into Defence
The efficacy of Red Flag Alert's business data is underscored by the accurate prediction of 1,242 insolvencies in the last 30 days alone. Remarkably, users were provided with a prewarning period of up to 1.4 years, averaging 110 days.
This substantial lead time before potential insolvency occurs among partners, suppliers, clients, and more is invaluable, offering organisations a crucial head start.
Red Flag Alert's software not only acts as a vigilant monitor but also empowers businesses to navigate the countdown to insolvency effectively, providing a proactive approach to financial challenges and enhancing overall resilience.
When the alarm bells ring, businesses can capitalise on this extended timeframe to enact decisive measures. Take a look at the following steps businesses can take when the countdown to insolvency begins.
Countdown to Insolvency - Six Months' Notice
With six months' notice of potential insolvencies among partners or suppliers, businesses gain a valuable window of opportunity to implement proactive measures. Key steps include assessing and diversifying suppliers, renegotiating contracts and payment terms, strengthening contractual protections, and continuous monitoring of financial health through Red Flag Alert's comprehensive tools.
Countdown to Insolvency - Three Months' Notice
A three-month warning prompts swift and strategic actions to mitigate risks and safeguard operations. Building financial reserves, establishing contingency plans, seeking legal advice, and assessing inventory levels become crucial. Red Flag Alert's prospecting tools aid in identifying low-risk backup suppliers, facilitating a seamless transition of operations.
Countdown to Insolvency - One Month Notice
With just one month's notice, businesses need to conduct a customer impact assessment, review insurance coverage, identify immediate alternatives, renegotiate contracts, and communicate transparently with customers to maintain trust. Early notice enables businesses to strategically respond, ensuring continuity and minimising financial impact.
Protect Your Business from Insolvency Risk with Red Flag Alert
Red Flag Alert has revolutionised the monitoring process with specialist-powered tools that include tailored portfolio optimisation, powerful analysis tools, and one-click customization. This ensures that businesses receive only relevant alerts, reducing the risk of overlooking crucial data points. The tools also streamline sharing alerts across departments, enhancing visibility and minimising the risk of delayed critical alerts.
As predictions indicate a potential surge in insolvencies, Red Flag Alert stands as the UK's premier insolvency risk service provider. The database features comprehensive data on every UK company, an AI algorithm utilising 15 years of company data, real-time updates, monitoring and alert tools, AML checks, and sales prospecting tools. Companies rely on Red Flag Alert's insolvency risk services to assess credit risks and make informed decisions.
In conclusion, businesses are urged to reject conventional monitoring solutions and embrace growth with Red Flag Alert. The countdown to insolvency becomes an opportunity for strategic response and growth, ensuring businesses thrive in the face of challenges so get a free trial of the platform today
