High quality accountants are not generally the first thing that comes to mind when your business is in financial trouble and that’s a pity.
Inevitably, your focus is on trying to resolve your cash problems and to raise enough money to stay solvent. If you can get accountants to help you at an early stage, you can approach your problems in a planned and sensible fashion, instead of stumbling from crisis to crisis. Your accountants should also provide you with an informed and unbiased view of your situation and likely solutions.
Your over-riding emotion is likely to be embarrassment at having to share your problems with your creditors, your employees and so on. It is amazing how little helpful content is available for businesses in financial difficulties. Unsure about what to do, most people simply let the situation drift in the hope that somehow a solution will magically appear.
Doing nothing while your business is collapsing around your ears is poor management to say the least and will totally destroy your credibility with creditors and employees alike.
Timely and decisive action is the key to solving your problems but you are unlikely to have the know-how or the experience to know what to do and when to do it.
Call in your accountants immediately and proceed to do the following:
Establish where you stand: Ask your chartered accountant to establish your current financial position, the underlying causes of your problems and whether your business is viable.
Establish if the problems can be resolved with the help of your chartered accountant: address the causes of your problems to ascertain if they can be fixed. Also determine what else you need to do in order to make your business viable.
At this stage, two alternatives will emerge. If your business is potentially viable, you can go on to:
Establish a business revival plan: This is a plan that will identify in detail what is required to be done to turn around your business. Specific actions and timelines need to be established.
If your business is not potentially viable, you should move on to:
Establish an exit plan: This may involve winding up your business and planning to sell assets in an orderly fashion. The objective will be to extricate you with the minimum possible damage.
You are unlikely to succeed in either revival or exit without the wholehearted cooperation of your creditors and your employees. The above plans will provide you with a solid basis for negotiation. Your accountants should also be able to negotiate on your behalf and save you considerable personal embarrassment.
If you feel that all is not going well with your business, you must act decisively and quickly. Commence the process today by hiring an outstanding firm of accountants.