FAQ

Administration, a procedure being carried out by a court-appointed administrator under insolvency laws, is not necessarily a quick fix for a company. 

That said, administration procedures can be as short as a couple of weeks should the objective of the procedure be achieved within this short time frame. If, for example, a pre-pack sale has taken place with the proceeds of the sale being received in this time, there is no reason why the administration procedure should take any longer. However, administration can last up to 12 months, with possible extensions of up to 6 months with court consent – the process can be incredibly lengthy.

Here, we explain a little more about what the different exit routes are when it comes to the administration procedure:

CVA / handing back to the director

In this instance, the company would be handed back to directors and shareholders, with the objective of the procedure having been fully achieved and having ensured that the creditors have been paid the relevant money as, without this, the process cannot be completed and wrapped up.

If there is an instance in which the company can satisfy all its debts in full, the administrator will propose a simple CVA as a mechanism through which all debts can be paid and administration can be exited. Once this mechanism is in place, directors relinquish control.

Liquidation

If there remain assets to realise at a company, or debts to settle, this can be done through the process of liquidation. Without the need to make expensive court applications to remain in place, liquidation provides a time and money-saving option for the company in question.

Dissolution

After the administrator has carried out the relevant work, one option may be to dissolve the company which in turn rids the company of the need to complete the further insolvency process of liquidation. This will usually occur where asset realisation is complete and, in that instance, there is no need for further investigation. Alternatively, this may happen if there is no money to distribute to creditors and, indeed, no hope of further recoveries. In this situation, the dissolution of a company may be sought by the administrator, closing the company and having it removed from the company record.

The administration court process is the process involved when a company goes into administration. With two possible ways to enter voluntary administration, there are various considerations when deciding which is the best route for your company.

Court application

One option is to make an application that will be heard before a court. This is the most common way of applying for administration for your insolvent company, with the majority of administrative action being taken in this way.

If a winding-up order is issued, the proposed administrator notifies the creditor who presented the petition. Both parties can then attend a hearing prior to the court, in which the proposed administrator will be represented by a barrister. In this hearing, the creditor can object to the administration process if desired, before the court can assess the issue and decide upon the right outcome.

Out of court application

In some circumstances, however, you can make an application for administration without the need to go before the court. This action can be taken so long as the following requirements are met:

• The company must be insolvent or likely to become insolvent.
• There are no Qualifying Floating Charge Holders (or, if there are, they have received notice of the proposed appointment and consented).
• The administrator is confident that they can achieve.
• The successful rescue of the company.
• A better result for the creditors than the prospect they would be faced with should the company go into liquidation.
• An improvement in the realisation for one or more preferential creditors.
• There are no winding-up petitions present or outstanding.
• There is no administrative receiver appointed for any of the company’s assets.
• Any prior administration experienced by the company must have been at least twelve months prior to the present one.

If these criteria are met, the application can go ahead, with the charge holder being notified before they either consent to the administration or 5 working days pass with no reply from them. Following this, the relevant papers will be filed in court and an administrator will be appointed.

As a director, it can be a difficult moment to recognise that liquidation is the best option for your company’s future, as well as your own. If your business reaches a point beyond which it can no longer make payments to creditors and has no further funds to inject into the business, voluntarily liquidating the company’s assets is often the wisest choice, and advice from a business recovery and insolvency specialist such as BCIA Recovery & Turnaround should be sought. Here we’ve explained what to expect as a director when your company is going through liquidation, and what responsibilities you will have throughout the process.

As soon as a company goes into liquidation, directors’ powers must immediately cease; they may no longer control any aspect of the company, act on behalf of the business or sell any assets. The appointed insolvency practitioner will take over control of the company’s assets throughout the process, relying on directors for assistance.

Directors are responsible for supplying their appointed liquidator with all paper and asset records required during the process. These can include:

• List of creditors
• Company asset records
• Employee details and pay information
• Accounting records

It is important that directors assist with the liquidation process in whatever way is asked of them, and do not intentionally misinform the liquidator; if they are found to have supplied false information or to have continued trading when they knew insolvency was inevitable, a director can be personally liable for the company’s debts.

What next?

For many directors, the insolvency of a business is an extremely stressful process to go through, and it can be difficult to see a large part of their life completely shut down.

The good news, however, is that our business recovery specialists can advise you on how to continue to be a director of another company, and avoid the mistakes made the first time around. Provided your conduct was not deemed unfit during the liquidation process, a director can immediately go on to be a director of another limited company.

We are dedicated to guiding you and your business through difficult processes such as liquidation with the utmost care and professionalism. For further advice for your company, or to discuss any of the services we offer, simply get in touch with one of our experienced specialists today to see how we can be of assistance to you.

Many companies can hit financial troubles at some point during trading, and often a range of solutions are available to directors. However, as the decision maker for the future of your company, it is important for a director to recognise when your company falls into debt issues out of your control, and when it is time to act.

If your company is no longer able to make payments to its creditors, and there are no more funds to inject into the business, then you are officially insolvent, and cannot legally continue to trade. At this point it is essential to contact insolvency experts to discuss your situation and the options available to you. Here at BCIA Recovery & Turnaround, we’re on hand to help guide you through this process, and our specialists can advise on the best next steps to take for your business and for you.

Why contact BCIA Recovery & Turnaround?

The insolvency process can have many legal barriers and restrictions, and without the expert guidance of our qualified teams, directors could find themselves unintentionally breaking the law and being found liable for the debts of the company and the liquidation process personally. We have assisted many companies with financial problems and know how to guide directors through what is expected of them to ensure all responsibilities are carried out legally and as efficiently as possible.

Our experienced consultants can analyse your individual circumstances and find the solution that suits your company best. Recovery specialists are not there to criticise or judge your business decisions, but rather to guide you out of your current financial circumstances and find a way to help.

What now?

We offer a free, no obligation evaluation, and can personally visit you to discuss your situation, so there are no upfront costs when seeking initial advice. Our experienced teams act with your company’s interests as their priority when finding solutions to debt issues – be it guiding the company through liquidation, or finding alternative methods that could even allow your business to regain financial stability.

When seeking turnaround advice for your business, it can be difficult to know what to look for, or know whose advice is most valid. With many companies offering insolvency advice, we know the struggle directors can face when seeking options for a way to turn things around for their business. Our insolvency experts have listed some of the top things to look for when seeking turnaround advice, and why BCIA Recovery & Turnaround value these core attributes.

Specialists

It’s important that you know who you are talking to, and that they are specialists in the situation you face. Here at BCIA, we specialise in business recovery, financial solutions, and personal debt solutions – and our experts are trained to assist you in assessing the options available to you.

Experience

When it comes to the future of your business and your livelihood, you want to be assured that your advisor has the experience to guide you through the necessary steps. We have over 40 years of experience in the business recovery and financial turnaround industry, allowing us to have forged a path as one of the leading experts in our field.

Testimonials

One of the best ways to tell if you’re with the right company, is if they have happy customers. We display testimonies and case studies on our website, showing how proud we are of the work we’ve carried out with our previous clients.

Contact time

Find out how your advisor will work with you before seeking turnaround advice – this is important to manage your expectations. Our advisors work with you to find a solution, but it is worth confirming how much contact time you will have with one another first.

Fees

Make sure you agree a fee in advance, in writing. Here at BCIA Recovery & Turnaround, we pride ourselves on our competitive pricing options. We offer a no obligation consultation and free initial meeting in order to meet prospective clients and understand the situation before we agree a contract.

Trading out is a common approach which a company may take if they have serious cashflow difficulties, but not to the extent that the business is in danger of bankruptcy. This turnaround option is one of the most straightforward ways of dealing with a cashflow issue, but only if this issue has arisen because of a clear reason, and the business is not in a position where it is about to fail.

It is important to seek advice to ensure that your company is not on the verge of insolvency before deciding to trade out. Should your business be beyond the point of remaining viable even with financial relief, insolvency options may be more suitable to you and should not be delayed.

What to ask yourself first

It can be difficult for directors to acknowledge that their business’s problems are more severe than they appear, and for this reason the wrong decisions are often made. When considering trading out, it is important to consider the following questions:

• Is money the only issue? Will money solve all the problems the company currently faces?
• Is this business financially viable in the long term?
• Have you cut as many costs as possible?
• Have you sought expert insolvency advice from professionals?

What to do

If you and a professional insolvency adviser have agreed that the temporary shortage of finance can be rectified and the business is viable beyond this issue, trading out is a good option for you. You should contact your creditors to explain your situation and provide a detailed explanation of how you will restore the business and repay their loan. You can then attempt to negotiate a restructure of the repayments owed to each creditor.

Plan

When trading out, careful planning is essential to its success in saving your business. Ensure that you have calculated the scale of the financial problems faced and make a detailed budget that will turn the business around with exact time frames. This will boost your creditors’ confidence in your plan, making it more likely they will negotiate with you regarding repayments. A good relationship with creditors is key when trading out.

All companies are responsible for paying VAT and PAYE to HMRC, and if these payments are missed, HMRC will investigate and potentially take legal action to acquire the money owed. If you are unable to pay your taxes as a company, you may be insolvent. It is important to act now and address this issue, rather than spend what money you do have on the business, as this will lead to penalties taken against you by HMRC.

What are the options?

If you are completely unable to pay the taxes and cannot foresee a time when you will be able to in future, it is likely to your business is now insolvent and you should cease trading. As insolvency experts, our team here at BCIA Recovery & Turnaround can assess your situation and negotiate your conditions with HMRC directly.

If you just need more time to pay off the debt, however, you can apply to enter a Time to Pay (TTP) arrangement with HMRC. This scheme allows you to pay off the debt over a set time, but note that your application may not always be accepted, so you should have an alternative plan in place.

Penalties

It is important to remember that HMRC will have dealt with companies that have not paid their debts many times and may be strict on you due to hearing many excuses frequently. You should act appropriately to how your business is performing to ensure you and HMRC can arrange the most suitable agreement – accepting that your business is insolvent may be difficult but may also be the best way of stopping fines.

If you miss several VAT and PAYE payments, you are automatically charged a percentage of the owed taxes, which will rise as more payments are missed. Should you fail to pay back your debts for a significant amount of time, the situation can even result in criminal charges – so get in touch with our team and act now.

Insolvency is the inability of a company to pay back its debts or to meet their financial obligations. It is essential that, as the company director, you act immediately when finding your company insolvent, or you could risk being personally liable for the company’s debts if you continue trading.

It can be difficult, however, to determine if your company is actually insolvent. We’ve listed below what some of the warning signs are, and how to tell the difference between your business struggling and insolvency.

Insolvency warning signs

Look out for some of these warning signs of insolvency:

• Your overdraft is always at the limit
• Your bank refuses your company a loan
• Your bank wants personal guarantees
• Paying creditors is always a struggle financially
• You regularly miss payment deadlines

If you recognise several warning signs to be true of your company, it could be insolvent. There are several tests to determine if it is:

Cashflow

The cashflow test simply asks whether the company can pay its debts when they are due. If deadlines are often missed, particularly by a long margin, this is a sign the business may be insolvent, and action should be taken. This includes tax debts such as PAYE and VAT, as well as any outstanding bills owed to other creditors.

Balance sheet

Do you owe more than you own? If your debts amount to more than the company’s assets, you may be insolvent. It’s important to draw up a balance sheet and factor everything in to reflect a true picture for the business. If you are not insolvent on a balance sheet test but are on the cashflow test you should still seek pre-insolvency advice from our experts to assess your situation.

Legal action

Your creditor could obtain a County Court Judgement against your company, which is a legal decision from the court stating that you owe the creditor money. If the judgement remains unpaid, the court could decide to investigate your business and its finances to determine if you are insolvent. It’s important not to continue trading if you are unable to pay back your creditors, as this could lead to you being accused of wrongful trading by the courts.

Bankruptcy and insolvency are two terms often confused for one another, and are assumed to mean the same thing. However, there are a few differences between the two terms, and our experts at BCIA Recovery & Turnaround have specified them in this article.

What is insolvency?

A company is insolvent when debts cannot be paid back to lenders on time anymore. Insolvency is when all trading and processes must discontinue because financial difficulties mean payments and debts can no longer be met. This is often due to cashflow in being lower than cashflow out, with an income too low for debts to be paid off.

What is insolvency?

Insolvency is not a legal process, but simply describes the current state of a business. A company that is insolvent does not have to declare bankruptcy – there are a number of alternative methods for taking control of finances, however bankruptcy is often a last resort and one of the most common solutions to insolvency for many businesses.

What is bankruptcy?

By contrast, bankruptcy is the legal declaration of inability to pay off debts. It is the way of dealing with debts if you are unable to pay them back, and is generally seen as the last resort in a situation where there are no other alternatives. This is because it tends to involve selling off any assets, so can have considerable consequences for your career.  Your credit rating will be marked for a significant amount of time, meaning credit cards or any other credit applications (mortgage, loan etc) will likely be declined.

Bankruptcy means that, by law, the company or person must attempt to pay off what is owed with help from the government. This can take two forms:

• Reorganization bankruptcy - The debtor restructures repayment plans so they are more easily met and in a manageable timeframe agreed by creditors.
• Liquidation bankruptcy - The debtor sells all assets of the business in order to make enough money to pay their creditors back.

When a company is insolvent, it is essential that all directors immediately cease trading. By law, a director who is found to have continued to trade after acknowledging insolvency can be disqualified, which can lead to a range of penalties. To avoid any charges being placed against you, our advisers here at BCIA Recovery & Turnaround have outlined what company director disqualification is, and how to ensure you are not liable to be accused.

A director can be disqualified if, during insolvency proceedings, it is deemed they have not met their legal responsibilities and acted unlawfully whilst insolvent. A director’s conduct may be deemed unfit during insolvency proceedings, at which point their actions will be investigated by the courts. Unfit conduct includes:

• To continue trading as a company when it can no longer pay its creditors
• A lack of proper or detailed company accounting records
• Failure to send accounts and returns to Companies House
• Failure to pay tax owed
• The use of company funds or assets for one’s own personal gain

Could I be liable?

If your company is involved in insolvency proceedings, or a complaint has been made against you, your company (or you personally) may be investigated by the Insolvency Service. If this occurs, you will be informed in writing of what you are accused of that makes you an unfit director, when they intend to start a disqualification process, and what your options to respond are.

Your options:

• Wait for the Insolvency Service to take you to court in order to disqualify you, in which case you can defend yourself in court if you wish to do so.
• Voluntarily disqualify yourself, which will end court action against you.

Disqualification penalties

If you are disqualified as a company director, you will be unable to be the director of any UK registered company, or be involved in any aspect of the running of a company. This includes management responsibilities such as hiring staff, controlling accounts, or being tasked with making executive decisions. Further restrictions upon disqualification include not being able to sit on the board of a charity, police authority or school, not being able to be a registered landlord, be a solicitor or accountant, or a pension trustee

Disqualification can last up to 15 years, depending on the severity of each case, and can even result in a prison sentence of up to 2 years if the terms are broken.

HMRC debt is a common problem for companies that are struggling financially, as trade creditors are often incorrectly prioritised to pay back first. As a creditor, HMRC can be quick to resort to formal recovery action to ensure your debts are paid back. This action can take the form of bailiffs to reclaim your assets, or the decision to issue a winding-up petition which could lead to you needing to cease trading completely.

 It’s important to deal with your HMRC debt as soon as possible to avoid severe legal action being taken against you. Here, we’ve listed a few of your options when dealing with tax debt.

Propose a payment plan to HMRC

One option to dealing with your HMRC debt is to approach them yourself with an offer of a payment plan, known as Time to Pay Arrangements. If you choose this option, you should be aware that it can be difficult to make sensible plans with HMRC, and they are unlikely to accept a repayment plan that takes more than 12 months.

What’s more, HMRC are unlikely to renegotiate with you once a payment plan has been agreed, and will start recovery action very quickly if a payment is missed.

Use BCIA Recovery & Turnaround to propose a plan

Alternatively, our insolvency experts here at BCIA Recovery & Turnaround can formulate a Time to Pay Agreement to propose to HMRC on your behalf. As professionals in this field, we’re experienced in structuring a plan more likely to be accepted by HMRC, and that will positively impact your company. By approaching us, you are significantly increasing your chances of having HMRC agree to a realistic payment plan that suits them and you as well.

Restructure the business

Restructuring your company through a formal insolvency procedure removes the difficulties of dealing with HMRC and can also enable you to formally address any other debt issues the company may have. This option can often be a cheaper alternative, allowing you to move forward more quickly if a reasonable payment plan is not an option to your company.

If you are unable to reach an agreement, or are unable to keep up the payments you have agreed, HMRC can take the following action against you:

Possessions seized

The process formerly known as levy and distraint is now commonly referred to a ‘taking control of goods’ whereby HMRC sends bailiffs to your business premises. The bailiffs seize your possessions and assets to be taken to auction. Any money made from the auction will then be used to pay your bill, with any additional money given back to you, and any outstanding money still owed.

If HMRC choose to take this option, you will be issued a document listing your possessions to sign by someone from HMRC – if you choose not to sign this, your possessions will be seized on the day, but you will have 5 days to pay your bill. If you do sign the document, your possessions will not be seized until the 5-day window has expired – the possessions will subsequently become the property of HMRC from the day of their first visit.

Court

Another option HMRC can choose to take if you do not pay your tax bill is to issue court proceedings.

Magistrates’ Court

Proceedings can start in a Magistrates’ court when you owe a maximum of £2,000 and have owed it for less than a year. If HMRC chooses this action, you will be issued with a summons informing you of when the hearing is.

You can pay your bill at any time, at which point you will no longer have to go to court. Should the matter go to court, the magistrate can order you to pay your bill as well as court costs and can send bailiffs to take your belongings if you do not make the payment.

County Court

If your debt cannot be collected via the two options mentioned above, HMRC can start County Court proceedings against you. Again, you can pay back your debt at any time and stop the legal proceedings, however if you do not pay what is owed you can be ordered to pay your debt plus court fees.

In this case, your details will also be put on the Register of Judgments, Orders and Fines, which will negatively affect your record rating and cause problems when you try to open a bank account or apply for credit in future.

Winding-up petition

Finally, HMRC may issue a winding-up petition for monies owed to them if your company fails to pay its debts, or if the debt exceeds the company’s total assets thereby rendering it as insolvent by definition. As a sole trader or for personal tax bills HMRC will often issue a bankruptcy petition.

HMRC are the most powerful of unsecured creditors by virtue of the fact that they do not need to obtain a court judgment in order to initiate the most hostile of action against a company. It is imperative that you deal with them at an early stage.

If your company is struggling financially, you may find that keeping up to date with paying debts back to your creditors is difficult, leaving you behind on payments. It is important that you maintain a direct and honest contact with all your creditors when this happens to avoid them putting excess pressure on you.

Creditor pressure can be a massive burden on any business owner and knowing what your rights – and your creditor’s rights – are is important. Our experts here at BCIA Recovery & Turnaround have explained what can cause creditor pressure, what their rights are, and how best to alleviate it.

What causes creditor pressure?

Creditor pressure can occur due to many reasons, leaving your company unable to pay your debts on time. This can be as a result of losing a contract or clients, or even just over time from several late payments due to financial difficulties.

Whatever the reason for your creditors pressuring you, it is important that you understand what your creditors’ rights are and how you can best alleviate the situation.

What rights do creditors have?

Your creditors have every right to pass the task of demanding repayment on to a debt collection agency, or to sell the debt to a third party.

They also have the right to serve a written notice to you, requesting repayment of the loan and any interest that is owed due to late payment. In certain situations, your creditor may take legal action against you to take you to court to begin a formal insolvency procedure which could lead to bankruptcy. This is the case if you have been served with a statutory demand requiring payment of a debt of more than £750 which you have failed to comply with for more than 21 days.

When are creditors overstepping their rights?

Although your creditors have the right to demand repayment, there are boundaries with the extent they can go to, and if overstepped, you may be able to seek a remedy in court which could reduce or eliminate your debt to the creditor.

Your creditors can be accused of harassment for any of the following:

• Phoning frequently, particularly at unsociable hours
• Using the services of multiple debt collectors for the same debt
• Demanding larger repayments than what you owe
• Making aggressive contact or threats
• Threatening court action when they know that they do not have the right to do so
• Threatening that you will face imprisonment if you fail to repay your debts

How can I alleviate creditor pressure?

The most obvious way to alleviate creditor pressure is to make efforts to repay the debt. If this is not possible immediately, one of the most straightforward ways to attempt to alleviate creditor pressure on your business is to talk directly with your creditors regarding the current financial circumstances the company is in and negotiate a repayment plan that is in their best interest but gives your company the best chance of fulfilling it.

If you are facing creditor pressure and need advice, contact us today to book a free consultation with our advisors, and we’ll be happy to provide our expert advice on your company’s circumstances.

As a business owner, it’s important to be able to protect your company assets in the event of a claim or pressure from creditors. With no plan in place, you could lose valuable assets should your business fall into financial difficulties or debt with creditors. Here, our experts have outlined what asset protection for business owners is, and how you can avoid losses should you face claims from your creditors.

What is asset protection?

An asset protection plan insulates both your business’s assets and your personal assets should a creditor make a claim against you due to debts owed. This is a useful preventative method for the event of your business falling into financial difficulty and becoming unable to repay debts.

Why is asset protection important?

It’s important as a business owner to be prepared for the risks you face if you fall into debt, and act to minimise the loss to your business. Asset protection plans employ legal strategies put into place before a creditor claim arises, which act to deter the claim or help to prevent your assets being seized.

What types of asset do I need to protect?

Company assets typically fall into two categories – safe and dangerous. Dangerous assets are more likely to be seized in the event of a claim, whereas safe assets do not create a risk of liability. Safe assets include stocks and bonds ownership, and individual bank accounts. Dangerous assets which are more at risk without a protection plan include:

• Company vehicles
• Tools and equipment (all bar one set of ‘tools of the trade’)
• Commercial property
• Rented real estate

How can I implement asset protection?

Asset protection plans can be quickly implemented without disrupting trading – it is essential that you put a plan in place before any claims or lawsuits arise. Any plans made whilst a claim is ongoing could be thrown out in court.

When your business is struggling, many directors will feel the temptation to insert their own money into the company in an attempt to revitalise it. This can be a huge risk, with the potential for that money to never be seen again.

Should I put my own money into the business?

As a director of a limited company, your personal assets are protected if the company fails. If you put your own savings into your company and it collapses, however, it is likely that you will not see a return on your investment, leading to a loss of your own money.

For this reason, it is often strongly recommended that you do not put your own money into your business if it is failing, as you will want to avoid any personal losses should the business fail to recover. There are fortunately several alternatives to look at when your business is struggling, so finding a different solution is the best way forward.

How to inject money into the business

Whilst putting your own money into a struggling business is inadvisable, there may be several alternate solutions on offer that provide a temporary solution to inject cash into the business. In some cases, increasing your cashflow can be all the business needs to get back on its feet. This can include:

• Selling more stock
• Seeking payment from any debtors
• Offering discounts for early payment
• Cut outgoings

Another alternative to putting your own money into a struggling business is to find ways to cut down on the company’s outgoings, and therefore saving money that can be used to help the business with its financial difficulties. Think of current outgoings that could be cut down – it is likely that some sacrifices will need to be made in order to keep money in the company. Areas of the business you could look at include:

• Move offices – A smaller office means a cheaper rent, which can free up a lot of cash to help the business. Even consider moving your company’s headquarters to your home if you do not have many staff members, to avoid having to pay rent at all for a temporary solution.
• Renegotiate with suppliers – Ask your suppliers to re-evaluate your contract with them, for example if you buy items in bulk you can make savings which could be crucial to a struggling business.
• Redundancies – Making employees redundant can be a stressful decision to make, but if your company is failing, it may be one of the best solutions to cut outgoings and keep finance within the business.
• Take a salary cut – Cutting back your own salary temporarily can be a good way of keeping money in the company, allowing it to get back on its feet at which point you can increase your salary again.

If your company is facing insolvency, it is essential that you act as quickly as possible to ensure you make the best choice for your company.

For many new businesses, cashflow problems will occur at some point, whether it’s due to a slow trading period, losses, or another reason. A cashflow problem arises when the business starts to struggle to pay its debts, which can lead to insolvency if not addressed immediately.

A lack of cash within the business is a common reason for a business failing and going into insolvency, so recovering from your problems early is essential. Here at BCIA Recovery & Turnaround, we’re experienced in providing businesses with financial advice, so here we focus on how to recover from your cashflow problems and avoid becoming insolvent.

Invoice

Invoicing clients promptly will help to ensure that you are paid on time, injecting funds into the business when they are needed. Keep a regular log of what you are owed, and make sure that all debts are collected when due to keep a consistent flow of cash into the business.

Raise prices

If you are struggling financially as a business, you could consider raising the prices of your merchandise or services. This can be helpful in providing finance to the business, particularly if clients pay late or there are slow periods, but be mindful not to raise your prices at the sacrifice of loyal clients – this could lead to you losing more money than you make!

Cut costs

Looking for ways to cut outgoings within the business can be one of the most effective ways to help your business recover from a cashflow problem. Look over your accounts closely and consider ways to cut down current costs that you are paying. Examples include:

• Rent
• Employees
• Personal salary
• Benefits

Marketing

Many companies make the mistake of cutting back on marketing costs when in financial difficulty, but this lack of direct action can actually result in the company collapsing completely. Assess your current marketing strategy for ways to drive sales, such as utilising free methods of advertising like blogs, social media or emailing campaigns to customers.

Negotiate with creditors

If you are struggling to meet regular payments with your creditors, discussing your financial problems with them and re-negotiating a contract may be the best step forward. If your creditor agrees, you can push back repayment dates, freeing up existing cash within the business to help the company as a temporary and fast solution.