Is my company in financial difficulty?
Sign’s that may indicate your company is in financial difficulty:
- Signs that may indicate your company is in financial difficulty:
- On-going losses
- Poor cash flow
- Absence of a business plan
- Incomplete financial records or disorganised internal accounting procedures
- Lack of cash-flow forecasts and other budgets
- Increasing debt (liabilities greater than assets)
- Problems selling stock or collecting debts
- Unrecoverable loans to associated parties
- Creditors unpaid outside usual terms
- Solicitors’ letters, demands, summonses, judgements or warrants issued against your company
- Suppliers placing your company on cash-on-delivery (COD) terms
- Issuing post-dated cheques or dishonouring cheques
- Special arrangements with selected creditors
- Payments to creditors of rounded sums that are not reconcilable to specific invoices
- Overdraft limit reached or defaults on loan or interest payments
- Problems obtaining finance
- Change of bank, lender or increased monitoring/involvement by financier
- Inability to raise funds from shareholders
- Overdue taxes
- Board disputes and director resignations, or loss of key management or personnel
- Increased level of complaints or queries raised with suppliers
- An expectation that the ‘next’ big job/sale/contract will save the company.
