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ADDING VALUE TO YOUR BUSINESS

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Is your Business experiencing financial difficulties? Here are 7 positive actions you can take.

 

 

 

 

 

 

 

Any business can find itself facing financial challenges.

Temporary cash-flow problems either due to slow paying customers or as a result of changes in the businesses market conditions are not unusual.

 

So, what can be done?

 

Improve cash collection

It’s a fine line between upsetting a long-term customer and their delayed payment or non-payment causing massive problems for your own business. Cash is king and early dialogue with slow paying customers is key. There are times when issuing proceedings has to be done to in order to give a clear message that outstanding monies must be paid.

 

Alternative sources of finance

Businesses can look to alternative sources of finance such as Invoice Factoring or Discounting whereby cash can be raised immediately against invoices raised. Advice from a professional can guide you through the small print of the different arrangements ensuring the best outcome for your business.

 

Re-scheduling debt

Early dialogue with principal creditors (including HMRC) can be imperative.

A professional advisor can agree a repayment plan on your behalf before you default on payments.

 

Informal schemes with creditors

In certain circumstances, creditors are willing to agree to an informal plan of repayment if they are fully aware of the reasons for non-payment. For example, if the business is awaiting payment from a customer. Whilst these schemes only tend to work when there is a relatively low number of creditors, it can greatly benefit a business, particularly if put forward by a professional practice.

 

Formal insolvency proceedings (Companies and Partnerships)-Administration

Administration can work well for businesses. It can provide a period of ‘’breathing space’’.  This is an opportunity to seek professional advice and evolve with a stronger business model.

 

Individual Voluntary Arrangements (IVA)

An IVA can assist an individual, regardless of whether they are trading or not. Your professional advisor can agree a fair proposal for you and your creditors.

 

Formal insolvency proceedings-Company Voluntary Arrangements (CVA)

A CVA can allow businesses to repay creditors over an extended period.  Such schemes are favoured by HMRC in particular, as they know the scheme will be monitored by a professional and independent Insolvency Practitioner.

We assisted a Haulage Contractor who was experiencing temporary unforeseen cash-flow difficulties. The business fell into arrears with HMRC. Our professional advice was to propose a CVA. Alternative insolvency proceedings could have resulted in the company losing its ‘Operators’ Licence. A CVA enabled HMRC to be fully repaid over an extended period and the company retained its ‘Operators’ Licence. Most importantly the staff retained their jobs too.

 

The most important piece of advice we offer to any Business Owner or Individual is to seek professional help and advice at an early stage, as there are positive actions that you can take. Creditors, in particular HMRC, the most common and involuntary creditor, are generally speaking more than happy to discuss any fair proposal. They do understand that the alternative is usually a worse outcome for them.

 

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