If you suspect your own business, or that of a client or customer may be facing severe financial difficulty, the most important thing is to admit that there might be a problem as early as possible. Identifying problems, or potential problems early will help you make the right decisions about the best way forward.
When it comes to businesses facing financial difficulty, there are some common warning signs to look out for. These include:
- Bills remaining unpaid by debtors for longer periods than normal and, or a growing number of bills remaining unpaid.
- A growing amount of ongoing work that is not being billed on time.
- Cash reserves that are dwindling or overdraft limits that are increasing.
- Stock that is stagnant awaiting sales that do no materialise with the same regularity as before.
- Falling behind with payments of suppliers’ invoices.
- Using cash reserves to pay bills, or even worse, relying on post-dated cheques to keep suppliers temporarily at bay.
- Experiencing difficulty with suppliers because they have not been paid on time.
- Receiving large numbers of final demands or writs from suppliers, or having difficulty sourcing supplies.
- Facing growing VAT and PAYE issues.
- Receiving statutory demands for payment.
While this list is not exhaustive, it will help spot the early signs of financial difficulty, either in your own business or that of your customers or clients. When you see any of these signs, the most important thing is to take the right action. It may well be that you can negotiate yourself out of financial difficulty, but if that is not possible, at UHY Hacker Young we are here to help. We know what needs to be done to help avoid financial disaster in your own business or to help avoid a bad debt stemming from the problems being faced by your client or customer.
The next step
If you suspect you may be heading into financial difficulty, why not get in touch? The right solution may be simpler and more accessible than you imagine.