For most companies that find themselves in financial trouble, insolvency didn’t happen overnight. This is something that has likely been building for quite a long time and is coming to a head. When you know the signs of insolvency and what to look for, it can help you turn things around before you find yourself in an insolvent situation that leads you into liquidation. Principle Insolvency is here to talk about insolvency and what the warning signs of insolvency often look like, in an effort to help you avoid liquidation and turn your business around.
Power in Looking Ahead
When you know what is coming your way, it can help you recognize the red flags before your company reaches its breaking point. There is power in looking ahead so that you can make changes and adjustments that have the ability to change everything. Sometimes, these warning signs are present for years. Here are some of the warning signs you should be looking for that can indicate your company is in trouble:
– IRD Debt Over $50,000: Once your debt increases to over $50,000, it can be difficult to negotiate lenient repayment terms. The IRD sees this an increased risk.
– Missed PAYE or GST Payments: PAYE and GST are trust monies. It shouldn’t be negotiable to make these payments. When you consistently miss payments, it can trigger enforcement action as using them for operating expenses is a serious problem in the eyes of IRD.
– Struggling to Make Payroll: You shouldn’t have to draw on your personal funds to make payroll. Likewise, making payroll shouldn’t get in the way of making payments to suppliers and other aspects of doing business either.
– Borrowing to Pay Bills: It is always a sign of trouble when you are borrowing to pay your bills. You shouldn’t need to use credit cards, personal loans or having to factor into day to day operations. There is something that isn’t working if this is where you’re finding yourself.
– Immediate Payment from Suppliers: When you find that the suppliers you’re working with are requiring immediate repayment or are shortening their terms with you, it is a sign that they see red flags in the way you’re doing business.
– Personal Guarantees: You shouldn’t have to rely too heavily on personal guaranteed loans or leases. It shows that your business as well as your personal assets are at risk.
– Personal Stresses: Your business life and stress shouldn’t carry over too much into your personal life. If you are finding that the stress of doing business is putting strain on your personal relationships, there is likely something that needs to be addressed.
Insolvency Services in Auckland, Hamilton, Levin & New Zealand Wide
If you are in trouble financially with your company, you can turn to Principle Insolvency to help you map out the next steps you need to take. We can help guide you through your options moving forward. Call us today!