As the year is drawing to a close, business owners should have a look at their operations and determine whether their business is still viable. It is especially important as some of the key government measures ensuring survival of businesses are set to end by 31 December 2020. These measures include the temporary:
- increase of threshold to issue a statutory demand;
- increase in the period to respond to a statutory demand;
- moratorium on, among others, termination of leases and eviction of tenants; and
- moratorium on insolvency trading.
Recognising and admitting that a business is in trouble is a first step to recovery. Identifying the signs of insolvency and acting early provides the business the best chance to turn around. It is thus pertinent for business consultants and advisers like you to understand the early warning signs of insolvency for your client’s business and start the process of recovery. Here are some of the common early warning signs that a business might be on the verge of insolvency and may require professional assistance:
- Cashflow issues including inability to pay trade creditors promptly
- Insufficient cash reserves
- Inability/difficulty in accessing finance
- Late payments for superannuation
- Staffing issues including a high turnover of staff
- Increase in aged creditors
- Having repayment plans or payment arrangements in place
How we can help
We, as insolvency advisers, will also be able to help you identify the issues of a business and suggest the options that are available in order to mitigate the risks involved, especially for directors. So, if you wish to discuss a client’s circumstances, contact our Brisbane or Gold Coast offices for a confidential discussion with no upfront cost.