Businesses often regard the first quarter of the year as the most challenging as consumers cut back on spending after the Christmas period. A recent survey from leading business rescue company Begbies Traynor has reaffirmed just how testing it can be.
According to its latest quarterly Red Flag Alert research, conducted earlier this month, levels of business distress among UK firms rose between the final three months of 2011 and the first quarter of this year by 55%.
The reason for this decline has been attributed to the challenges business are facing in accessing traditional bank finance, overcoming late payment and the general cash flow pressure that epitomises today's trading climate. However things aren't quite as bad as they'd first appear.
For instance, Begbies' research found that distress levels actually fell on an annual basis by 17%, with the manufacturing sector - which remains central to the economy's recovery attempts - leading the charge.
With the Office for National Statistics next week set to confirm whether the UK avoided the dreaded double-dip recession after contracting by 0.3% in the final quarter of 2011, it's vital that UK businesses continue to do all they can to keep their cash flows healthy in the current climate.