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Warning Signs of Insolvency


It’s a difficult situation when you are firmly entrenched in a supply chain and your clients are the feed for this chain. What would happen if one of your clients became insolvent and stopped trading?

Here at the Timothy James Partnership we are used to spotting the signs which indicate businesses in distress and then acting to help those companies out of trouble before it is too late.

Here are a few signs that may help you identify if your clients may be starting to suffer with cash flow problems.

  1. Extending payment period - are your clients taking longer to pay their invoices with you or have they asked for longer payment terms?

 

  1. Companies House Filing - Check at Companies House and see if your client has entered a late filing period for its annual accounts. It is free to do this and allows you to spot other anomalies such as changes to officers as well.

 

  1. Changes in client business? - Are you seeing changes in the client’s business? There are often sudden changed in management, reductions in fleet numbers, redundancies, staff departures for example, which can be indicative of a business that is struggling.

 

  1. Extending accounting period – have the accounts been filed on time? Some companies extend their accounting period when they are having difficulties

 

  1. Getting hold of your client – are they harder to get hold of and do they not reply to correspondence chasing money?

 

Spotting these factors can help you take action to protect your own business from the potential fall-out should a client become insolvent and stop trading. Insolvencies can be caused by bad debts and watching out for these signs and taking early action could help you from suffering bad debts. 

The Timothy James Partnership works to help businesses in financial difficulty and we can advise you on how to deal with situations which may put your business at risk of insolvency.


Added: 01 Dec 2016 12:00


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The Timothy James Partnership

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Insolvency Practitioners Association
About Us


We are an independent firm of specialist Licensed Insolvency Practitioners located in Bromsgrove, Worcestershire.

At The Timothy James Partnership, we work very closely with local businesses and professionals, providing guidance on formal insolvency procedures and advice on restructuring businesses.

We recognise that at times, companies find themselves in difficult financial circumstances and our aim is to provide practical solutions in these situations.