It’s easy to chase turnover, only to run into working capital issues and the old cliché “turnover is vanity profit is sanity still holds”.
Cash flow rarely flows in a steady stream and costs can rise sharply and unexpectedly. This can lead to liquidity issues (the ability to access funds to meet outgoings) even for the largest of companies.
We, along with our consultancy partners, are skilled at spotting signs of financial stress and can offer a variety of solutions to ease financial pressure points that if not addressed can result in the collapse of a business. One of the biggest challenges we face is that insolvency practitioners are thought of as the undertakers in the business world, dealing solely with dead companies. However, we are equally capable of providing turnaround and rescue solutions. Too often we are contacted too late when many of the turnaround options have been lost and the only option insolvency.
An insolvency practitioner will give you various options regarding your company: -
Company Voluntary Arrangement (CVA)
This is an agreement with creditors to repay the debts or a percentage of the debts over an agreed period. It means that the directors retain control of the company whilst being supervised with the arrangement and ensuring that the agreed terms are met.
A rescue procedure to achieve at least one of the following objectives: -
1. Rescue the company as a going concern
2. Achieve a better result than if the company went into liquidation
3. Make a distribution to secure and / or preferential creditors
Assets are sold, and the insolvency practitioner will then pay the creditors in an order set by law.
If your business is showing any of the symptoms below, then you should contact us to discuss various options that may be available to you:-
· Lack of cash flow
· High interest payments
· Defaulting on payment of bills
· Extending debtors or reducing creditors days
· Falling margins