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My Company Has Cash Flow Problems: What Are My Options for Recovery?

Written by Keith Tully

Once a company begins experiencing cash flow problems the biggest worry for directors is being faced with a winding up petition. It may be just a temporary problem that can easily be resolved, but the underlying issues could be serious which will take radical steps to rescue a business. Business cash flow problems open the door for a great number of other issues which can lead to formal insolvency proceedings unless you seek help from professional insolvency specialists at the very first warning signs.

What Is a Cash Flow Problem?

In a nutshell, a cash flow problem is simply when debts outweigh the money coming in. There could be a number of reasons why a business has a deficit in available funds, but usually the sources of cash flow problems can be categorised into three main areas:

  • A surplus of outstanding/uncollected invoices
  • Products/services not moving
  • Poor business model/ineffective management

Real Business Rescue can help to quickly identify where your difficulties lie in order to begin turning around your distressed business. We often find that the issues underlying a cash flow problem are the result of several factors. For example, uncollected invoices could very well be the result of incompetent management! Without a careful analysis of your books, it would be difficult to suggest a viable route to recovery.

How Might a Business Deal with a Cash Flow Problem?

There are several ways in which a business could deal with a cash flow problem but the first thing to keep in mind is that cash flow problems are probably a good indicator that your business is insolvent at the moment. Talk to an insolvency specialist to see how you can quickly make funds available to get up to date with your creditors. The problem arises when your company is insolvent with no thought to how bills will be paid in the future. For this reason, contact an Insolvency Practitioner or insolvency specialist the moment you realize cash flow is a problem. It is our job to keep you out of the courts and in business.

Options We Can Explore

Whether we need to help restructure your business, help you obtain financing or set up a Company Voluntary Arrangement with creditors, there is an answer to your financial worries. Sometimes these matters can be cleared up quite quickly. When advising how to avoid cash flow problems and the consequences of having no working capital, we may suggest invoice factoring if you have a surplus of uncollected debts from your customers. On the other hand, if your company has outmoded products or ineffective management, we may suggest Administration and restructuring to keep the creditors at bay.

Our ultimate goal here at Real Business Rescue is to find a means to help your company survive financial distress. The initial consultation is free, we can get right on the problem and nothing will have a fee attached unless we render a service for you. Cash flow problems don’t need to signal the end of the road for your company. Call us today to see how we can help you turn your current problems around. We are Real Business Rescue experts!

Keith Tully

Author
Keith Tully
Partner

Keith has been involved in Business Rescue since 1992, during which time he’s worked for both independent and national firms. His specialties include company restructuring matters and negotiating with HMRC on his clients behalf.

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