If your company has escalating debts and creditors are chasing you for payment that your company cannot afford, there is little time to waste.
A lot of companies can be faced with cash flow problems from time to time. Usually when money going out of the business is more than the money coming in.
This doesn’t necessarily mean that you are insolvent. Cash flow issues can be temporary and may only require restructure of the business. It could also mean there are bigger issues at hand and these will need to be addressed in order to rescue and turnaround the business.
Cash flow problems usually lead to an increased risk of legal action being taken by your creditors whilst you face an inability to pay all your debts as and when they fall due. This could lead to liquidation.
You can look to address your cash flow issues by different methods. An increase in sales, repaying company debts via time to pay arrangements with your creditors or trimming some of your business overheads.
If you are unable to action any of the above, your final option would be to look at formal payment proposals with some of your creditors such as HMRC.
Clark Oliver specialises in dealing with creditors such as HMRC and have success in negotiating payment arrangements for you. We have many relationships with specialist lenders who can look into potential funding options such as invoice factoring. Factoring can be a useful cash flow tool by allowing an advance of money business debts owed to you. This is especially helpful if outstanding invoices are causing pressure on your cash flow.
Cash flow issues can also lead to bigger worries such as Winding-Up Petitions. In some instances, the issues can be resolved via restructuring methods however, they can unusually lead to greater difficulties leading to formal insolvency. The earlier you seek professional advice from an Insolvency specialist the better.