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January: Business failures set to soar; UK companies take 51 days to pay invoices and more…

Fail safe
Business failures are set to increase by 50% in 2009,
BDO Stoy
Hayward’s
Industry Watch reported in November. The mid-tier
accountancy firm forecast there would be 32,300 business failures by the end of
2009. This figure approaches the 1992 peak of 33,900 and compares with its
expectations that 21,900 businesses will have failed by the close of 2008. BDO
added that the industries likely to drive this increase by the middle of the
year are construction, which would report 6,400 failures, business services,
with 5,700 failures, and real estate with 3,200 failures.

Talk talk
More than half of the 130 UK companies whose audited financial statements were
analysed by
Deloitte
use UK GAAP in their parent company statements, the auditor said. In its
research Deloitte also revealed that the annual reports of larger companies had
fewer pages focused on financials – on average just 43% of the average annual
report was comprised of financial information – with more pages focused on
narrative reporting. Most companies also included additional information as
required, such as a statement clarifying the consequences of applying fair value
accounting to some of their financial instruments.

Cough up
UK companies take an average of 51 days to pay invoices, according to credit
management company
Intrum
Justitia
. This is worse than companies in Germany, Switzerland and
Austria which take an average of 45 days after invoicing to pay, but better than
those in France, Belgium and the Netherlands, (56 days). The worst offenders are
Italian, Spanish and Portuguese companies, which take just over three months to
pay invoices. Companies in Sweden, Norway, Denmark and Finland scored a perfect
average of 30 days.

Problem halved?
Companies that have implemented shared finance services are not receiving the
benefits expected from pairing up, with two-thirds achieving cost reductions of
only 5% or less,
KPMG
has found. A further 30% of these shared service programs were deemed to have
failed to deliver on their original business case and one-fifth rated their
organisation’s shared services as poor or below average. The report also found
that investment in these shared services dried up after the initial set-up
phase.

Rewarding risk
Seeing opportunity where others see only risk, having a high level of competence
in evaluating risk and maintaining entrepreneurial spirit are cited as the
skills businesses will need most to survive the economic downturn, in a white
paper by credit insurer
Atradius.
The white paper drew its conclusions by assessing the characteristics of the 70
companies that have been winners of the Ruban d’Honneur award in the annual
European Business Awards.

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