Business is humming for insolvency experts who say a surge in receiverships and liquidations is coming close to levels last seen in the late 1980s.

But BDO Spicers’ partner Stephen Tubbs says the issues for today’s troubled companies are quite different from the problems of 1987.

“A lot of the issues at the moment basically involve the consequences of easy credit,” he says. “Most of the excesses that have been entered into [by companies] have been brought into sharp focus as the banks are basically reining things in.”

The virtual exit from the market of mezzanine finance lenders is also playing a part, Mr Tubbs adds.

PricewaterhouseCoopers partner Colin McCloy says debt was an issue in the 1980s and this time around – but this time the problems are more consumer-driven than corporate-driven. It is still “nothing as bad as the late 80s or 90s,” but companies need to get their debt down and manage cashflows tightly.

The retail, building, finance company, property and manufacturing industries are showing up more frequently than others in the spate of insolvencies, industry experts agree.

Meltzer Mason Heath partner Jeff Meltzer says things aren’t yet as busy as in the last sharp downturn of the late 1980s, but the period leading up to Christmas is potentially a difficult one.

He has warned the firm’s staff to be prepared, and they are all set to have Christmas close to home this year.

Manufacturing firms in particular always face problems at this time, he says. Many close down for up to four weeks but still bear holiday pay, rent and other overhead costs.

To add to the post-Christmas hangover, changes to tax payment dates could bring on cashflow problems mid-January.

January 15 is the usual date for companies to pay their December GST and PAYE, but this year they must also pay provisional tax as the deadlines have shifted from three to four times a year.

This means the January provisional tax payment will be less than a company’s usual instalment, but when combined with the GST and PAYE due it will be a triple whammy to the stretched post-Christmas budget.

“There’s going to be a big hit and I don’t think people really understand that impact of January 15,” Mr Meltzer says.

The change is even more of a reason for companies to focus on debt collection in the lead up to Christmas.

he Institute for Factors and Discounters (IFD) Brendan Green chairman says if companies don’t take stringent measures now, they could face serious cash flow problems when business closes post-Christmas.

“There is a very good reason why there is a spike in insolvencies in February and March each year. While many of these result from broader business fundamentals they are often triggered by restricted cash inflows over the Christmas and post Christmas period leaving businesses unable to meet commitments,” he says.

Mr Meltzer says while its common for companies to go on a collecting drive at this time of year, they often encounter customers ducking for cover while their own suppliers pester for payment.

Industry experts contacted for this story were divided on how persistent banks and other lenders were being in enforcing their loans.

Mr Tubbs says banks have become far more inclined to work through problems with customers than to take hasty receivership action. However, BDO Spicers tends to specialise in the “corporate doctor not the corporate undertaker” approach.

Mr Meltzer says creditor compromises could be used more widely, in cases where companies have a viable long-term future.

There’s a degree of optimism that the situation is not as bad as in previous downturns, he says. “If companies had been a little more cautious in the good times, then maybe they can get through the [coming] difficult times.”

Mr McCloy says banks always try to find a constructive solution to problem debts, but there is no doubt that recoveries are proving a lot more difficult in a market getting tougher by the minute.

But McDonald Vague partner John Whittfield says the proportion of receiverships the firm deals with has grown faster than liquidations.

This shows that lenders are less likely to roll over their loans than they might previously have done if there is a problem, he says.

“They want to call up their money – [it’s] the natural nervousness of the market.”