The latest insolvency figures are not the kind of headlines that make for cheerful reading, but they do tell us something important about where UK businesses are right now. Margins are under pressure from rising input costs, wage bills, and weaker consumer demand, causing the gap between a healthy business and a struggling one to narrow considerably.
According to The Insolvency Service, 2,022 companies in England and Wales entered formal insolvency in March 2026, which was a 7% rise since February.
Look behind the monthly numbers and the picture is mixed rather than catastrophic. Total insolvencies for 2025 came in at 27,975, which was actually a 7% reduction on 2024, according to Creditsafe analysis of the official data. The insolvency rate has eased very slightly from 53.0 per 10,000 companies a year ago to 51.6 per 10,000 now. Yet rates remain well above pre-pandemic levels. The recent spike in March was driven largely by more than 100 connected real estate companies entering administration, which shows how difficulty for one business can change the headline figure.
What does any of this mean for the business owner who is trying to run a profitable, sustainable company in the middle of all this? It means control of your finances is more important than ever. Cash flow discipline should not be a quarterly tidy-up exercise but a monthly habit, and in choppy conditions it can be the habit that separates the businesses that come through difficult periods from the ones that do not.
Why monthly cash flow review matters more now
A late payment from a major customer that would have been an inconvenience in 2019 can become a serious problem in 2026. Reviewing your cash position once a quarter is no longer enough. By the time the quarterly numbers land on your desk, the situation may already have moved past the point where simple interventions would have worked.
Monthly cash flow review comes down to asking yourself a small number of honest questions and being willing to act on the answers. The beautifully formatted spreadsheet for the board pack is a secondary concern.
The questions to ask every month:
How much cash do I actually have available right now, and how does that compare to last month?
Not the figure on the balance sheet at the year end. The figure today, with current commitments factored in. If the trend is downward over three consecutive months, that is a signal you need to pay attention to.
What does my cash position look like in twelve weeks if nothing changes?
A rolling thirteen-week cash flow forecast is one of the most useful tools a director can build. It shows you where the pinch points are before you reach them, and it gives you time to do something about them.
Who owes me money, and how old is that debt?
Aged debtors creep up quietly. If your average days to payment has drifted from forty-five days to sixty over the last six months, your customers are using you as their working capital facility. That has to be addressed directly, with conversations rather than just polite reminder emails.
What are my biggest committed outflows over the next three months?
Tax payments, rent quarters, supplier accounts, payroll. Knowing what is coming and when allows you to plan rather than react.
Where is my margin actually being eroded?
It is rarely one big thing. It is usually several small ones: input prices creeping up, a contract that was profitable two years ago that no longer is, an inefficient process that costs more in labour than it should. A monthly review forces you to look at the components of margin rather than just the bottom line.
Am I paying my own bills on time, and what is happening to my own creditor days?
If you are stretching your suppliers further than you used to, that is a warning sign about your own cash position. Suppliers notice, and the longer it goes on, the more it affects the relationships and credit terms you depend on.
The harder question
Underneath all of these is the question most directors avoid: if the next twelve months look like the last twelve, can my business survive in its current shape? Not "will trading improve?" or "will the economy turn?" but "if conditions stay roughly where they are, what needs to change?"
Cash flow problems and viability problems are not the same thing. A business with a temporary cash flow gap and an underlying viable model has options. A business whose cost base no longer matches its revenue has different options, and those options narrow the longer the conversation is delayed.
Where to take it from here
If your monthly cash flow review is not currently a discipline, this is the month to start. Block the time in the diary, gather the right numbers, and answer the questions honestly. If the answers concern you, take advice early. The range of options available to a business that picks up the phone in month three of a difficult patch is considerably wider than the range available in month nine.
The current environment is not catastrophic, but it is not forgiving either. Discipline now is what gives you choices later.
If you do find yourself in a situation where you need some business rescue advice, an initial consultation with Even Keel Solutions presents no cost or obligation. We’re an experienced team with strong values. Call us on 01202 237337.
Sources
The Insolvency Service, Company Insolvency Statistics March 2026 (published April 2026).
The Insolvency Service, Company Insolvency Statistics, twelve-month rolling rates to March 2026.
Creditsafe, Monthly Business Insolvency Figures, March 2026.
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