How To Know When You Need The Help Of An Insolvency Practitioner

Being faced with extreme financial difficulties is never a pleasant experience to go through. Whether in an individual capacity or through your business, the implications of not being able to pay your debts can be incredibly serious. It’s imperative that you know when it’s time to reach out for help from an insolvency practitioner - here are some clear signs that you need their help. 

Your debts are increasing

In many cases, it’s natural and financially healthy to have a certain amount of debt. Credit can be a safe and efficient way of helping your business grow, and it’s common for companies to borrow to this end. 

That being said, when those debts don’t appear to be decreasing, and you’re struggling to even cover the interest, it’s a sign that you may need help from an insolvency practitioner. Those debts can start to snowball, and you want to make sure you have a clear plan in place to avoid this from happening.

Slowing profits

While this is an early indicator, it’s definitely one to look out for. If you’re seeing a steady decline in your profit, it could be worth reaching out to an insolvency practitioner. The earlier you reach out, the higher the chances are that you’ll be able to implement a solution that actually avoids insolvency, allowing you to continue running the company in question. As with everything, prevention is a preferable strategy for insolvency-related issues.

You’re experiencing severe cash flow problems

Another key indicator of financial problems is if you’re experiencing cash flow issues. This can represent a step up from being unable to repay more conventional loans; if you’re now unable to meet payroll deadlines, or pay your suppliers on time (or at all) it’s a clear sign that you may imminently face insolvency. It’s important to get an insolvency practitioner in, so they can take a look at your company’s financial health and hopefully implement a strategy to salvage the situation.

You’re facing legal action

When insolvency issues reach a certain point, creditors will start to pile the pressure on. They may start to pursue court judgements, winding up petitions, and a range of other stressful means of seeking repayment. An insolvency practitioner will be able to inspect the financial health of your company, and see what kind of solution there might be to the situation you find yourself in. Things will have probably progressed past an easy solution by this point, but you can still likely limit any further damage.

While these are a few example situations in which it might be beneficial to reach out to an insolvency practitioner, they’re by no means the only ones. It’s important to stay on top of your accounts at all times, with the help of an experienced accountant. If you spot any worrying trends, whether decreasing profits or rising debts, then it’s a clear indicator that you should probably be looking for assistance, to prevent any further damage from being done.