The symptoms of insolvency
A partner at Hall Chadwick has outlined some of the symptoms of insolvency businesses may display as they enter troubled waters.
Steven Gladman, a partner with Hall Chadwick Accountants and Business Advisors, said with increasing numbers of businesses “going to the wall” it’s “vital to be prepared and look out for the early warning signs”.
These could include continuing losses and overdue Commonwealth and state taxes, while business owners who have a poor relationship with their bank and are not able to borrow further funds may also be at risk.
Other insolvency warning signs include an inability to raise further equity capital from another source, creditors being unpaid outside trading terms, and the issuing of post-dated or dishonoured cheques.
Gladman said catching “the first hint of trouble could make all the difference between a business surviving or failing”, and that getting good financial advice in the early stages is essential.
He said industries that could be badly hit include the building and construction, mining, and financial services industries, along with businesses in the retail, restaurant, airline and automotive industries.
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