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The news of Wright Hassall entering a pre-pack administration after 179 years is a sobering reminder that longevity and regulation do not guarantee financial resilience. Professional services firms often look stable from the outside, yet the warning signs in this case were visible for months.
That is exactly why regular, objective credit management audits matter.
Where stronger credit management could have changed the story
While every insolvency has multiple moving parts, several themes in the article point directly to credit and cashflow control:
1. Mounting pressure was visible early
Shrinking headcount, tighter margins and falling profitability rarely happen in isolation. They are often symptoms of cash being trapped in work in progress and unpaid invoices. A robust credit management review would have flagged whether debtor days were creeping up, whether billing was timely, and whether cash conversion was keeping pace with costs.
2. Reliance on aged WIP or debtors to plug gaps
The article notes growing reliance on aged WIP and debtors. That is a classic red flag. If cashflow depends on “eventually” collecting old balances, the business is already funding itself on hope. Strong credit management tightens engagement letters, billing cadence, follow-up processes, and escalation routes before balances become unmanageable.
3. Working capital cycles in professional services are fragile
Partner-led revenue and regulatory complexity mean firms cannot simply pivot quickly when cash tightens. Good credit management provides stability in the one area you can control: getting paid promptly for work already done.
4. Early warning signs were there
Fee-earner churn, margin compression, tax arrears, rising regulatory notifications, and partner exits all intensify quickly when cashflow is weak. A proactive credit audit creates an early warning dashboard so leadership can act while options still exist.
A simple truth: cashflow buys time, time buys options
When credit control is consistent and strategically managed, firms preserve working capital, avoid firefighting, and retain the confidence of partners, staff, regulators and clients. In many cases, that breathing space is what allows restructuring, merger talks, or turnaround funding to succeed.
Without it, the path narrows fast.
If you are a partner, director, or finance lead in a regulated professional services firm, now is the moment to pressure-test your credit and cashflow fundamentals.
Whether you are seeing early strain or simply want reassurance, an audit gives you clarity and control.
Contact us today