Whether you are concerned for your business’ health, or that of a customer or client, many of the early-warning signs of financial difficulty are the same.
The following are typical signs of a business facing a potential financial crisis:
- Deteriorating debtor collections
- Increasing WIP value that is not billed on time
- Cash at bank is reducing/ the overdraft is steadily increasing
- Rising stock levels and static/ deteriorating sales
- Slow or late payment of suppliers’ invoices
- Clearing debts by lump-sum payments on account
- Increasingly making payment by post-dated cheques
- Leave paying old invoices until you need delivery of a new order
- Using disputes to delay payment to suppliers
- Receiving an increasing number of final demands and writs from suppliers
- An ever-widening search for new suppliers who will make more credit available
- Escalating VAT and PAYE arrears
- Receiving a statutory demand for payment
If any of the above applies to your business, or that of a customer or client, you should seek urgent professional advice from a licensed insolvency practitioner who will provide suitable business turnaround solutions. If advice is taken early enough, it may still be possible to save your business, or prevent a potential bad debt. It could also avoid the consequences of potential personal liability of directors for allowing their company to trade on without reasonable prospect of avoiding insolvency.
The next step
If you would like to discuss our turnaround and recovery services in more detail, please contact one of our turnaround and recovery specialists at your nearest location, or complete the contact form.