As a result, Menzies Corporate Restructuring, is urging SME owners to be extra vigilant, to keep a tighter rein on the company finances, and to ‘heed the alarm bells, when they start ringing’.
The turnaround and business recovery firm made this plea following an analysis of insolvency cases it has been involved in over the past six months.
Andrew Stoneman, a partner in MCR said a combination of the economic climate as well as hikes in insurance premiums and NI contributions were helping to create a ‘”desperate times, desperate measures” ethos pervading so much of the SME sector.
‘Sadly, it means that many SMEs cease trading, having been almost eaten away from the inside out, even though often the fraud took place in the misguided belief that it would somehow help the company out of a tight spot.’
The warning signs to look out for include:
- a supplier never returning calls
- lack of management accounts
- small stock levels
- examples of insolvency or director disqualification
- high staff turnover and low morale
- autocratic management style
- general operational inefficiencies.
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