Insolvency can be described as a company’s inability to fully discharge all of the debts in their name as they become due. If your company has reached this state of affairs then you are in a pretty serious position. It is illegal to carry out business activities knowing that you are insolvent. However, if things have not yet reached the level of insolvency, but you are aware that your cash flow problems are increasing, you need to take action straight away and get the professional business and financial help and support that you need to get your business back on track.
If you are experiencing any of the following then it is time you sought help for your business.
- Your business continues to lose money and cash flow is only going one way: If your business is continuing to make a loss, look at what else you have that you could sell to raise some money. Think about unused assets and what income they could generate and look at ways that you can reduce your company overheads.
- Creditors are chasing you for late payment: If you can’t pay your supplier invoices by their due date, you may find that they are only willing to undertake any further dealings on a cash on delivery basis, so that they can be sure that they are going to be paid. If your suppliers stop your credit facility, it is going to have a further negative impact on your cash flow.
- Demands for payment and threats of legal action: If the post that arrives every day consists of overdue payment notices it is not going to be long before you are putting up a going out of business sign.
- A substantial drop in sales: If your sales are not reaching your sales targets then you will not be creating the revenue that you need in order to pay off your creditors. It is no good just hoping that a big sale will happen. Sales need to be consistent in online slots order for you to meet the company’s financial obligations.
- Debtors reports: Do you have a number of outstanding debtor accounts on your ledger? If you are not being effective in collecting the money that is owed to you, how do you expect to survive?
- You can’t get finance: If your company is unable to secure finance from reputable lenders it is a sure sign that your business is going to the wall. Get help as soon as you can, before you find you are investing your own savings into the company to keep it afloat.
- Missing Paper Trail: Is there a hole in your financial reporting? Are your accounting procedures carried out on a more ‘as and when’ basis than as a regular part of your business day? Without a valid paper trail it is impossible to analyse just where your business has made mistakes. If you really struggle with the accounts, hire an accountant to do them for you!
Laura writes for www.realbusinessrescue.co.uk a website which specialises in providing professional and confidential advice to businesses that are facing administration and insolvency.