Cash flow tips: Don’t delay, seek advice today
6 March 2010
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With the latest statistics from the Insolvency Service showing that 2009 was a record year for corporate insolvencies, many fear 2010 will be just as challenging. Read on to find out how early action can help to protect your business before it's too late.

If your company is experiencing cash flow problems then it can be tempting to just wait and see what happens, expecting or even hoping that the situation improves. However, if it doesn't you could actually be making things worse by delaying.
 
Company insolvency can involve many complex issues. It would be very easy for a director of an insolvent company to commit criminal offences without even realising, so proper professional advice should always be sought.

The key for small businesses faced with financial problems is to seek advice early and keep talking to your creditors. If creditors see management taking positive steps to turn a business around, they are more likely to be understanding and supportive.

If a company turns its back on mounting problems, then creditors will move in to protect their position. This could spell long-term problems for your company.

Where a company is insolvent a director's duty to the creditors overrides all other duties. The company's assets must be managed to give priority to the all creditors, not just one or more specific creditors.
 
With a mixture of common sense and specialist advice, directors can often quite properly trade while insolvent.
 
If your company does have cash flow problems, then you should at least be doing the following:
    • Have access to the most up-to-date financial information for your business
    • Hold regular directors' meetings
    • Document all decisions made
    • Seek professional advice.
How the FPB can help
 
We appreciate that there is still some uncertainty within the business community and that directors can be under immense pressure when deciding what is best for the company, especially when the company is in financial difficulty.
 
That is why we have partnered with F A Simms & Partners, an independent business rescue and insolvency practice, to provide our members with a free, confidential helpline to get independent, professional advice.
 
This can help you to make sense of the issues, discover alternative courses of action and help you weigh up the pros and cons of each. They will ensure the decision you take will be the best available for all concerned and above all will be taken with confidence.
 
If your business is having financial difficulties then call the FPB member helpline on 0845 130 1722 now and we can put you in touch with our dedicated expert credit control advisers.


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