Company Directors Looking for Help with Solvency Issues?

Editors Note: This Guest post is by Sachin

If you’re a company director, you’ll be only too well aware of the very difficult issues related to solvency problems. Some of these situations can seem like they came out of a horror movie. Before you start thinking about liquidation and other possibilities, however, there’s a lot you can do.

The problems

The things that threaten the company bottom line are never straightforward. These problems are usually not simple, single issues, and sometimes they’re on the books before you can see them coming. They’re most commonly a sudden tangle of multiple problems. Issues seem to blow up overnight, all at once, and naturally all at exactly the wrong times.

The results are usually highly destructive:

• Inadequate cash flow: This instantly affects all areas of business, reducing the company’s ability to deal with costs.

• Debts unpaid: Debtors can be serious risks, and bad debts can destroy a business very effectively.

• Creditors unpaid: A potentially lethal situation for any business, and one to be avoided at all costs.

• Operating costs in the red: This is a grim but reliable indicator of the viability of the business.

The Do It Yourself options

There are several options available to companies facing these serious problems:

Cash flow and debts: Debt recovery proceedings may well get back some of your money, and solve at least some of the financial issues, and put your cash flow back on track. Against this, you have to weigh the costs of the recovery process, and time frames in terms of your own needs.

Rescheduling loans: In most cases lenders will at least consider rescheduling business loans. They make more money out of rescheduling, so it’s a relatively simple solution. Rescheduling is an excellent option if your business goes back into the black as a result.

These options come with caveats, however-

• You must be sure you’re legally in the right when dealing with these problems. The legal issues can be quite tricky, particularly in the case of creditors, and must be managed properly and professionally.

• You must be sure that the financial benefits of taking these actions will definitely deal with the bottom line situation. If not, you’re still behind the eight ball.

The best option- Getting professional help

You may be surprised to hear that the very best people to get on your side to help your company get out of financial difficulties are in fact professional insolvency experts.

There are several very good reasons for getting expert assistance:

• Companies are covered by laws which do not permit them to trade when insolvent.

• Companies may be subject to legal charges over their assets from creditors.

• Any action taken by the company to deal with insolvency issues also involves various statutory processes, and these must be documented by law.

• The chance to avoid insolvency is only available for so long. Most cases of company liquidation usually occur after a company has left it too late to deal with its problems, and let its opportunities to turn itself around vanish.

If your company is in trouble, or can see it coming, help is only a phone call away. Call an insolvency expert.

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