When Do I Need to Consult a Licensed Insolvency Practitioner
For the best chance of turning things around and saving your business, you should consult an insolvency practitioner at the first sign that your company is facing financial difficulty.
Whilst insolvency practitioners are often called in to help businesses that have already become insolvent, their services are best put to use before things reach this critical point.
If your business is showing any of the following warning signs of insolvency, then you could benefit from seeking help and advice from an insolvency practitioner to overcome any difficulties you’re facing.
Cash flow problems
Poor cash flow is often the first indication that something is going wrong. Cash flow problems can be caused by many different factors including late payments from debtors, poor credit management, and lack of working capital.
Payments outstanding from debtors
If your debtors are late in paying you, then this can have a domino effect and put you behind with payments to your creditors too. If you’re forever chasing payments it could be a sign that your debt management processes aren’t up to scratch, or that it’s time to review your debtors’ payment terms.
Creditors keep calling to chase payments
If the phone is ringing off the hook and you’re feeling the pressure from your creditors, your cash flow problems could be more serious than you realise. Receiving a threat of legal action from a creditor should cause alarm bells to ring, remember that you only need to owe a debt of £750 or more to receive a winding-up petition from a disgruntled creditor.
You don’t have a clear picture of your finances
If your business finances are in a muddle and you’re burying your head in the sand over it, then you’re treading on thin ice. It’s easy for insolvency to creep up on you if you don’t have reliable processes in place to keep track of your business’ financial situation and help you to continue making intelligent business decisions based on facts and figures.
Ignoring the warning signs of approaching insolvency could be the nail in the coffin for your business. If you have any concerns about the state of your finances, get in touch with our expert insolvency practitioners here at Irwin Insolvency to get your business on the road to recovery.