Insolvency Practitioners Could Actually Save Your Busines
Many business owners believe that Insolvency Practitioners bring nothing but bad news. After all, it’s not until a business is in serious trouble that they get involved. However, they don’t always signal the death-knell for businesses. In fact, the opposite is very often the case; if an Insolvency specialist is brought in at the right time, they can and do save a great many companies from the brink of collapse.
Bring Them in Early
What many people often don’t realise is that it’s possible to bring Insolvency Practitioners in to help healthy businesses, for example, where owners believe that insolvency could be a risk in the near future. This means that they could be the solution that helps you out in your time of greatest need.
Of course, in order for them to help you save your business, you need to call them in at the right time. That means recognising the early warning signs of insolvency, so you can act early and, with their help, rectify any problems before they become insurmountable.
With that in mind, here are some vital warning signs to look out for:
- Struggling to pay employees, suppliers or contractors on time (or at all)
- Paying creditors later than agreed
- Liabilities outweighing assets
- Warnings from HMRC regarding tax payments
- Customers defaulting on payments (or being behind with payments)
- The threat of a winding-up petition
These are the kind of signals that your business may be in trouble, warning signs that an expert Insolvency Practitioner will spot immediately. If you notice any of these issues as being a problem in your business, Insolvency Practitioners may be able to help you reduce your risk of insolvency.
How Can They Help?
We all know that Insolvency Practitioners can be called in to help dissolve a company, but this is far from their only function. If you call them in soon enough, they can work with you, supporting you in saving your business.
Business rescue is a big part of what an Insolvency specialist does, and it could be the best way to save your business.
Insolvency Practitioners undergo training that enables them to give the best possible advice to company directors and business owners who are looking to rescue their businesses before it reaches the stage where they must resort to formal insolvency procedures.
Of course, they can only work within the law, and there are lots of complex procedures that must be worked through with a specialist level of knowledge before a company can be saved, but that is precisely the role and the capability of an Insolvency Practitioner. They will know what your options are, and they can help you choose the course of action that’s most likely to result in a good outcome for you and your business.
The most common business rescue options that Insolvency Practitioners can help with include:
An Informal Arrangement. This will give your business some extra time and breathing space to pay off your debts.
A Company Voluntary Arrangement. This is a process approved by a Formal Court, where you’re given as long as five years to repay either all or part of the debts your business has accrued.
Administration. Administration occurs when a court order is granted to protect a company while they look at other options to potentially save the business. Again, it’s a kind of financial breathing space.
Liquidation. Liquidation is what an Insolvency specialist will be looking to help you avoid. It’s the process of closing down a business and selling off any of its assets. Although this may sound like the worst outcome, it can allow directors to start again with a clean slate, although typically at a much smaller level.
Companies who are able to spot the signs of insolvency, and call in professional Insolvency Practitioners to assist them early on, are more likely to save their business before it gets to the point of liquidation. That’s why it’s so important that business owners and company directors take an active day-to-day interest in their company’s finances.
Even though it can be tempting to bury your head in the sand and pretend that everything’s going well, when your company is experiencing financial troubles, ignoring the problem is the worst thing you can do. Bringing in an Insolvency Practitioner might seem daunting, but once you know that they will work with you to get the best possible outcome and try to ultimately save your business, you’ll realise that they are not to be feared. Striking early to protect your business is essential, and expert Insolvency Practitioners can make all the difference.