How to avoid business insolvency
The next quarterly insolvency data is released on the 7th of November and is likely to show an increase in business insolvencies.
Clive Lewis, head of SME issues at the institute of Chartered Accountants lists some of the warning signs businesses should be alert to:
The numbers aren’t adding up: Your business is constantly pushing against your overdraft limit or you have no funds in the bank to pay suppliers and staff.
Making late payments: You are falling further behind with payments to creditors, are routinely paying on final demand or only once legal proceedings have started.
Avoiding the creditors: You are avoiding taking phone calls because it might be from somebody you owe money.
If any of the above applies to your business then it is important to deal with it immediately. Many businesses can be saved with professional advice.
It is often possible to refinance a business, or is not other methods are available. One of the most common is a voluntary arrangement, where a business trades their way out of trouble whilst gradually paying back debt at a rate agreed with the creditors.
“We face prolonged tough times, so it’s worth investing some time and effort in getting your business in shape now. An early conversation with a chartered accountant or qualified insolvency practitioner might help get the business back on an even keel,” said Clive Lewis.
