Tipping Point Checklist and Test for Business Rescue
03 July 2018
With major high street retailers such as House of Fraser, Marks & Spencer and Mothercare all taking drastic measures to save their businesses from insolvency
The senior management team at www.companydebt.com, a specialist debt and business recovery solutions firm, has released a detailed checklist and online test to help financial managers recognise the tell-tale signs before reaching the tipping point. If two or more of the following apply, it’s time to seek professional advice:- An operating cash flow ratio of less than 1
- Too many outstanding invoices waiting for payment
- No cash to pay creditors, who may be sending threatening letters
- Always operating at company overdraft limit
- Unable to pay employees
- Existing time to pay agreement with HMRC
- Lack of knowledge when it comes to management re-numeration either through salary or dividends
- Lack of ability to have financial information for up to date management accounts, or lack of input from accountant
- Large debtor goes bad creating a shift in how the cash flow of the business is going to work
- Over-reliance on one or two key customers for the business
- Legal disputes disrupting the ability of a director to run a business as it diverts time and energy
- Constantly dealing with problem/ firefighting?
Antony Smith, Managing Director at www.companydebt.com said, “All too often, senior management leave contacting us too late, preferring to bury their heads in the sand when financial problems emerge. By seeking professional support earlier, organisations can avoid major company restructures and eventually liquidation. We’d prefer to support managers before they reach the winding up petition stage and are here to help guide them through the business rescue options, before they reach their tipping point.”
