Warning Signs

There are many warning signs that your company is heading into financial difficulty, however unfortunately they are not always noticed in time. Avoidance of any difficulty can be achieved if you just know where to look for these signs and remove the chance of any problems before they become too great.

One of the most blatant signs would come from increased creditor pressure. Many creditors can be fairly lenient with payment terms if you maintain a good working relationship with them, however if they do begin to push harder for payments, then it is a likely scenario that you’re beginning to become insolvent. Creditor pressure can usually be calmed fairly easily if they are made aware of the companies situation, ignoring them will only make the pressure more intense.

Having CCJ’s filed against your company along with any other pursuit of legal action could also reveal deeper problems than originally appears. Legal action is a last resort for a creditor, and will usually be pursued once intense creditor pressure has gone unnoticed or seemingly ignored by the debtor. Furthermore, CCJ’s could have repercussions for a company going forwards as they would show on their company credit report for the foreseeable future.

There are many more subtle signs that our advisors will most likely be able to spot through their experiences such as:-

Inefficient stock control
Poor lead time maintenance
Lack of proper credit control procedures
Poor public relations
Ineffective marketing
Lack of proper communication channels
Inappropriate financing methods
Production line issues
Plus many many more

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