This is not a complete check list. You must take professional advice before you take any action these are a few of the things that you will need to consider.
Things you should do.
- Take professional advice from a Licensed Insolvency Practitioner. Gore and Company understands the needs of directors and provides a free helpline and free consultation to assist or to simply put your mind at rest.
- Develop an action plan and decide on a course of action based on sound financial information ( see below).
- Make sure you are not making the situation worse! If the company is in financial difficulty you must take steps to make sure that the trading situation does not get worse so that creditors lose out.
- Hold regular management and board meetings and keep a note of what was discussed and the actions that were decided upon.
- Make sure you have good and reliable financial information to enable you to understand the financial position of the business. This will include a recent set of management accounts and profit and cash flow forecasts.
- Keep a record of the decisions taken and the reasons for taking these decisions. This might be useful if your actions are subsequently questioned. In these notes you may wish to cover areas such as why trading has continued (because for example, you expected new sales), the financial information that you relied on etc. Make sure you understand what the assets are and what the value of your creditors is.
Things you should not do
- Don’t just assume things will get better and take no action. There is no harm in speaking to a professional advisor – just to put your mind at rest.
- Don’t think you have good handle on the financial figures – make sure you do (see above).
- Don’t ignore tax demands, letters from creditors and VAT returns.
- Don’t assume your customers will simply pay you - chase them up and ask for payment. Prepare a short term cash flow – maybe on a week by week basis - tell creditors when you will pay them and chase customers to get the cash in.
- Don’t think that the insolvency procedures are all about business closure. They are not - the procedures are there to try and help and to save the business.