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If you own your own company, the word insolvency is unlikely to be one that you associate with anything positive.
Under the British law, a company is considered to be insolvent if it is unable to pay its debts, even after selling all of its assets. While insolvency is an undesirable situation to find yourself and your company in, there are a number of options that companies can take to continue trading.
Read on for some of the best steps to take when dealing with insolvency.
Concentrate on your best customers
When your business is struggling financially, focusing on your most reliable, profitable customers can be an effective method of improving your cash-flow. Not taking on any new customers can also help you as you can focus on increasing work for customers you already have.
Cut your costs and repay your creditors
As a business, sometimes it is necessary to look at where you can cut your costs. You can cut costs on a number of different things including salaries, equipment and marketing materials and doing so is one of the most effective ways to get a business back to a viable position.
It’s also important to plan for the future and think about steps that you can take in order to reduce the risk of insolvency before it has happened.
How to reduce the risk of insolvency
When it comes to managing your businesses money well, there are a number of steps that you can take to reduce the risk of insolvency. Cash flow forecasting and credit control are both good options when it comes to this. Credit control helps improve the balance sheet of the business which will, in turn, reduce the chances of insolvency. Regularly updated cash flow forecasts provide an early warning system of any potential cash flow shortage so that steps can be taken to avoid any substantial damage or risk.
How we can help
Here at Bell & Co we are well versed in dealing with both individuals and companies that are in debt. We feel that the stigma attached to this has lessened and we are now hoping to help companies recognise all of the options that are available to them.
If you and your business is encountering problems regarding your finances, get in touch and someone from our team will be able to help.