Navigating Dangerous Waters – Lancashire Business View
Ian said: “Some very difficult questions need to be asked. Can Debt Be Negotiated? Can additional funding be raised? Are there surplus assets to transform cash ?
“Can they make a profit in the new post-pandemic normal? Costs can be cut any ffurther away ? Should less profitable products or services be abandoned?
“Speed is essential. The cash flow crisis is here and it is now.“
Another threat lurks, he adds. “Uuncontrolled grow in the recovery after a downturn pushes more companies on the cedge of liff than any other cause.
“So businessit is necessary be willful and resist the temptation to grow too quickly, unless they have the means to fund all the projectsra activity.“
Jimmy Fish, insolvency expert at Cowgills, emphasizes the importance business managers familiar with “faulty trading” and its implications.
He says: “This is a subject on which I have been asked more and more to advise recently, with co-directors.concerned about insolvent business and the risks they face in making so.”
He explains: “Directors may become personally liable to contribute to the assets of a company if the company was allowed to continue in business at a time when a director knew or should. knew that there was no reasonable prospect that the company avoid insolvent liquidation.
And he adds: “It is also important to note how customers are doing after the pandemic and to remain vigilant, to ensure that credit is offered on services and products.cts is not allowed to spiral and that accounts are routinely chasedy for payments in order to maintain cash flow control and manage your own creditors.
Andrew Ryder, insoI likecity practiceresponsible at JT Mawell said this manager cash flow, “life-some blood of all“ Business will be vital in thth month ahhead.
Aand he adds that to bringing staff back in af companiesend of leave and months from work will bring its own pressures.
André says that in his experience some directors fill a cash flow foredesign or have management accounts – vital tools they should have to ththeir elimination.