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Company in financial trouble

1 August 2017

Company in financial trouble

If you’re struggling to meet debt payments and cash flow is suffering, don’t panic! There are a number of options available to help turnaround the business if it is in financial trouble. 

Cut costs and improve cash flow 

Update your cash flow model and use a daily template so you know exactly what is being spent every day. Keep a close eye on accounts and cut out non-essential costs. You’d be surprised by how many things you don’t need.

See here for more tips on cutting costs. 

Debtor collection

Collecting late payments is a vital part of the business but it can also be time-consuming. Ensure you have a suitable credit policy and always have agreements in writing. Verbal correspondence will make chasing debtors more difficult. 

Find out other ways to improve debtor collection. 

Plan A or time to pay

If creditors are threatening legal actions, it’s worth looking at what we call, Plan A. This is an informal deal with creditors as a way to pay back debt over a relatively short time period. We may be able to arrange a Time To Pay (TTP) deal with HMRC on your behalf if you've fallen behind on VAT and PAYE payments.

Company Voluntary Arrangement (CVA)

Similar to Plan A, a CVA is a formal deal made with creditors to ensure debt is repaid over a set time-frame. The arrangement protects your company from legal actions and is a powerful restructuring and refinancing tool. Unlike a Time To Pay deal, up to 60% of unsecured debt can be written off. For a detailed CVA guide, click here.

Pre-pack Administration

If the company is under threat from an aggressive creditor, selling the company in a pre-pack administration deal to a third party may be the best option. This ultimately gets rid of debt and allows the business to continue. It can end those sleepless nights quickly! <g class="gr_ gr_43 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling ins-del" id="43" data-gr-id="43">Read out</g> <g class="gr_ gr_53 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep" id="53" data-gr-id="53">step-by-step</g> guide here.

A Worried Director

The Ultimate Guide For Worried Directors

Worried about poor cashflow? How to win new work? How to pay wages on pay day? For expert advice on a range of issues download our free Ultimate Guide For Worried Directors today. Or just call us on 0800 9700539

"KSA Group which owns this site, will help you fix problems in your business. We won't charge for any initial advice or face to face meetings. We speak in English. We will save you money and your precious time.  You can come to any of our offices

"We also follow up any meeting with a full "solutions report" which runs on average to 30 pages valuable free advice!!  No other practitioner offers this service.  In this report we advise on ALL the options and explain them clearly.  We advise on a course of action given the information you have given us ( the more information we have the better we can advise!)"

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