How do businesses with cash flow problems avoid closure?

A lot of times when we advise businesses in financial distress they are looking for an outcome that allows them to continue trading, it’s our goal to provide a solution that best fits each business individually and provides the most positive outcome possible.

To help illustrate this process, I thought it would be useful to highlight one of our recent cases;

We were approached to aid a software company producing programmes for the education sector; they had been trading for six years and business had been good in this time.

Recently they had won a contract to provide local schools with a new software product; if it was successful it would be rolled out nationwide providing an excellent and extremely profitable opportunity for the business. However the directors noticed that despite this, turnover was down. Focus had been taken away from the main core of the business while the new software was developed and so other areas had been allowed to slide.

The new software product had taken longer than anticipated to produce and had increased in cost meaning that problems with cash flow began to arise resulting in a build-up of debt that needed to be paid immediately.

We assessed the business’s situation and worked closely with directors and their accountants to ascertain all possible solutions. After thorough consultation we advised the best option to allow the business the time and relief from its creditors that it needed was to implement a Company Voluntary Arrangement (CVA).

With the CVA in place the pressure of debts on the company was removed, they were able to complete their software trial successfully and begin nationwide distribution as a result; even managing to become profitable enough to end their CVA early with a lump sum payment.

If advice is not sought and solutions found, situations like these can very easily progress into failed businesses; some only require time to get back on their feet, out from under the pressure of debts caused by poor cash flow.

Have you come across clients in this very situation? What are the biggest financial concerns facing your clients right now? Please drop me an email at a.fisher@focusinsolvencygroup.co.uk with your experiences, I would be happy to reply with any advice you might need for your clients.

Debt Advice Open Days

How are we able to complement the services you offer to your clients that are struggling with cash flow or debt problems?

We consider this question regularly, which in turn enables us to evolve, improve and expand upon the services we offer to both you and your clients allowing us to be tailored, relevant and convenient.

Focus Insolvency Group’s mission statement is to be ‘the UK’s number one premier rescue specialist for struggling businesses & consumers’ and so we are currently expanding our services and benefits nationwide.

We are increasing our nationwide coverage with a series of fixed location, easily accessible regional advice open days.

Our open days provide an opportunity for clients struggling with cash flow issues and debt to gain valuable face to face advice and guidance from an expert on a personal level at what is likely to be one of the most difficult times of their life. Appropriate solutions and strategies can be discussed in detail and implemented immediately to relieve the debt burden. Each client is provided with a personal appointment and as such booking is a necessity to make sure we set aside an appropriate amount of time for each person.

In our experience a level of empathy and an understanding personal service are core values and they run deep throughout Focus Insolvency Group, providing these values face to face alongside best advice is essential.

Open days are not only a perfect opportunity for you to refer clients in financial difficulty for advice, but also for us to meet our professional partners face to face, we’re always keen to forge new and mutually beneficial relationships as well as developing our current alliances.

You can view the current open day schedule on our website.

We will be complementing these open days by launching regional offices across the UK; currently these areas will include London, Bristol, Birmingham, Cambridge and York.

We attribute a large part of our success to date to having the right people in the right places ensuring that service remains our number one priority for our professional partners and our clients.

We are keen to know more about the challenges you face when you encounter a client with debt burdens and cash flow problems so that we can continue to develop the services we provide.

Managing Director and Licensed Insolvency Practitioner at Focus Insolvency Group, Anthony Fisher is happy to provide any advice you may need and will personally reply to every email or comment. You can contact him direct on a.fisher@focusinsolvencygroup.co.uk or call direct on 01257 257045.

If you are interested in coming along to one of our regional open days or would like to refer a client for advice, then you can email Andy Platt on a.platt@focusinsolvencygroup.co.uk or call direct on 01257 257038 to book an appointment at our next event in your area. We look forward to hearing from you.

The pitfalls of insolvent trading

Trading while insolvent can be a grave concern for directors in the current financial climate; there are many dangers that can affect directors of insolvent companies, some of which can lead to very serious and life altering consequences. It is important to be able to recognise the signs of insolvency and act upon them immediately in order to limit any damage to the business and director.

Firstly let’s explore exactly what being insolvent means for a business.

It can be established whether a business is insolvent or not by answering three simple questions.

1. Can the company pay its debts as and when they fall due?
2. Does the company owe to its creditors more than the worth of its assets?
3. Has the company had any CCJ’s or statutory demands made against it?

If the criteria of these questions cannot be satisfied then the business is more than likely insolvent and urgent advice should be sought from a licensed insolvency professional. Even if just one of the criteria cannot be met it still indicates insolvency.

When an insolvent state is determined it is important to act quickly as it immediately opens directors up to a numbers of dangers.

Personal Guarantees

A creditor with a personal guarantee will pursue the guarantee should a limited company find itself in financial difficulties. Whilst the life of a company might come to an end by way of formal insolvency procedures such as Creditors Voluntary Liquidation or being subject to a Winding-Up order, the creditor can still rely on the Personal Guarantee to look to recover any sums still outstanding from the person that gave that guarantee.

Disqualification

Directors may be prevented from holding a responsible post for up to 15 years if the Insolvency Service deems them unfit to be concerned in running a limited liability company.

Personal Liability for Wrongful Trading

Failure to take advice and implement appropriate procedures can make the directors potentially personally liable for the company debts as a result of the wrongful trading provisions in the Insolvency Act 1986. The amount the directors are likely to be liable for if found guilty is the actual amount that creditors have lost as a result of continuing to trade when they should have known the company was incapable of surviving in its current format.

Recovery of an overdrawn Directors Loan Account and Dividends

If your limited company should enter into Liquidation, the Liquidator will look to realise any assets. It might not have occurred to you but if you have an overdrawn Director’s Loan Account, this will be considered an asset of the Company and will be vigorously pursued by a Liquidator for the full amount that is overdrawn.

Fines or Imprisonment

Breaking the terms of disqualification can impose a fine or imprisonment

If you think your business may be insolvent or if you have concerns regarding any of the possible dangers to directors above then it is important you seek professional advice as soon as possible. Focus Insolvency Group are licensed insolvency practitioners and are able to offer free impartial advice to business owners and individuals alike, contact us today.

Image from freedigitalphotos.net

Businesses – What the 2013 Budget means for you

The announcement of Wednesday’s 2013 budget provided no real surprises but maybe some hope for businesses; we briefly examine changes and what they will mean.

Tax

The chancellor spoke of building the most competitive tax system in the world and wanting to support entrepreneurial spirit.

Corporation tax will be reduced by 1% to 20% in April 2015 to show that “Britain is open for business”, but the bank levy rate will increase to offset this by 0.142%

New measures against tax evasion are expected to bring in £3 billion in unpaid taxes. Three new anti-avoidance measures will target specific situations including corporate losses, partnerships and the use of off shore employment intermediaries. These measures reiterate the government’s policies creating a highly competitive but tax payer compliant system. The overwhelming majority of economic activity is already compliant but these newly announced measures are hoped to bring those that aren’t in line.

National Insurance

A new employment allowance is to be introduced that will cut the first £2,000 from employers NI bills. Around 450,000 small businesses will now pay no NI at all, around a third of all employers. This will be of little impact to larger companies but it will more than likely mean that smaller businesses can afford to hire more staff.

Infrastructure

Infrastructure will be boosted £3 billion a year from 2015-16 onwards which could provide medium term opportunities for the construction industry.

Anthony Fisher, Managing Director of Focus Insolvency Group commented, “It is encouraging to see that the Chancellor has helped businesses by reducing Corporation Tax and the costs of employing people. This should put more in the pockets of companies who will then be more willing to invest and hire employees. The UK economy must be attractive to business owners to obtain investment and growth.”

Businesses looking for safety and stability in the budget will have likely found what they are looking for, however the current economic environment will mean that growth will still be slow.

If you require any advice for your own business or for a client then please do not hesitate to get in touch.

Winding Up Petitions

Have you had a client issued with a Winding Up Petition (WUP) against their company?

In these situations it is extremely important to seek professional advice at the earliest opportunity in order to protect your client’s company and their interests as much as possible.

Due to the costs and implications involved in a WUP, issuing one to a company suggests that the creditor is very serious about recovering any money owed to them and probably sees this as a last resort after breakdowns in the business relationship. HMRC have been very quick in recent months to issue WUPs. Any creditor with a debt of £750 or more can move to issue a WUP.

A WUP, issued by HMRC or another creditor, is by far the most damaging and serious course of action that can be taken and will result in its closure and assets sold/employees dismissed if left to run its course in court with no defence or strategy/ proposal suggested as an alternative.

If the company is viable going forward and is to be saved then immediate action is essential! The very act of presenting a petition is likely to result in the bank account being frozen, which can cripple trading.

If the debt can be paid in full then this should be done immediately unless the debt is disputed, in which case legal representation is essential. Otherwise there may still be time to propose alternatives to the WUP such as a Company Voluntary Arrangement (CVA) or Administration. These are powerful tools to help rescue a company from collapse.

It is vital to seek professional insolvency advice by this stage to ascertain if the WUP can be halted and alternative arrangements made to pay the debt or risk the company being handed over to the Liquidator.

There may also be personal liability implications to the director or board members of a company issued with a WUP if personal guarantees have been made within the business or they are implicated in trading whilst insolvent.

If any of your clients have been issued with a WUP then do not hesitate to get in touch with us and we can work together to save the employees jobs and rescue the company.

PRESS RELEASE: Focus Insolvency Group continues growth into 2013 with acquisition of a leading restructuring business

After its most successful year to date in 2012 Wigan based Focus Insolvency Group are pleased to announce the acquisition of Phil Stone Consultancy.

Phil Stone Consultancy, which offers a nationwide service from its base in Newhaven, East Sussex will officially join the Focus Insolvency Group family on 21 January 2013 offering restructuring advice and solutions for businesses in financial distress.

The purchase of Phil Stone Consultancy means that Focus Insolvency Group can now offer a greater range of services to its clients than ever before as Managing Director Anthony Fisher explains:

“We are already well placed to offer advice, guidance and solutions on debt and money issues. However, sometimes a business may unintentionally suffer at the hands of its directors or others as they might have very little skill or experience in running a business. They are good at their trade, but know very little about finding good deals, negotiating settlements, marketing or book-keeping and staying on top of the administration. They are generally left to their own devices and even if their debts are managed into an affordable payment plan, the problem of bad management skills remains. The problems are then destined to be repeated and therefore need to be addressed from the outset for the future success of the business.”

The unique formula that Phil Stone Consultancy will bring ensures businesses who take these services up will benefit from increased revenues, decreased expenses and improved efficiencies within the business whilst Focus Insolvency Group will sort out the formal restructuring of the debts. Working with businesses in this way will give them every chance of success and will help to identify any further problems at an early stage.”

Phil Stone, who has built the business up over many decades has established trusted relationships with numerous accountants, financial advisors and the Citizens Advice Bureau, will stay on as Marketing Director. He commented:

“The synergy between our two firms was obvious from first contact. We all want to sort out businesses in trouble. Working together with Focus Insolvency Group is the best way to offer a complete service to struggling businesses. Being part of a well-respected Group will make it possible for more professional advisors around the country to introduce struggling clients to our full range of services.

Phil Stone consultancy will provide open days nationwide in convenient locations enabling businesses access to the face to face advice they need to get their business back on track.

For Further Information please contact

Anthony Fisher, Managing Director and Licensed Insolvency Practitioner

Tel: 07940 250810 email: a.fisher@focusinsolvencygroup.co.uk

Notes to Editors

• Focus Insolvency Group provides tailored, specialist advice and guidance to limited companies, sole traders, partnerships and individuals who are experiencing financial difficulties and consists of 3 main parts. Focus Insolvency Group which deals with corporate insolvency, Debtfocus which deals with personal insolvency and Moneyfocus which deals with financial solutions. Phil Stone Consultancy is now Focus Insolvency Group’s restructuring arm providing support and services to businesses nationwide that are struggling to survive.
• Anthony Fisher heads Focus Insolvency Group with a wealth of experience in both Corporate and Personal insolvency. Anthony has worked within the insolvency profession for over 18 years, qualifying as an Insolvency Practitioner in 2006 and starting his own practice in 2007.
• Anthony Fisher comments on a wide variety of personal and corporate insolvency issues and is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association. Anthony is also a Fellow Member of the Association of Business Recovery Professionals.

Press Release: Focus Insolvency Group are Joining Jack in the New Year

Focus Insolvency Group are delighted to announce that they have chosen to support the Wigan based charity ‘Joining Jack’ as part of their continuing charity work in the coming year.

Each year Focus Insolvency Group chooses a local charity to get behind by raising awareness and money for their cause. Previous events have involved taking part in the Great Manchester Run and the X-runner Wild Thing obstacle course and mud run.

Joining Jack was set up by former Wigan Warrior Andy Johnson and his wife Alex in aid of their son Jack who suffers from Duchenne muscular dystrophy (DMD), a rare and incurable muscle wasting condition. The charity began in May this year to raise awareness and fund research to find a cure.

Anthony Fisher, Managing Director of Focus Insolvency Group met the Joining Jack team at this year’s Wigan Business Expo. Anthony said,

‘It was great to meet the Joining Jack team supported by Andy’s fellow Wigan Warriors legend Jason Robinson at the Business Expo. The Joining Jack campaign has raised a lot of awareness in our area and I want us to help next year with this most worthy cause’

Andy Johnson, founder of Joining Jack said of the announcement,

“I’m incredibly grateful to hear of the support Focus Insolvency Group have offered to give us as their charity of the year 2013. We really appreciate businesses choosing to help Joining Jack. As a family we had no choice, we could not sit back and allow this terrible condition destroy the life of our son but one of the things that has really moved us is the willingness of other people to put their hands up and say that they are willing to join our fight. Thank you.”

Focus Insolvency Group leaves behind an amazing and successful year of support for their charity of 2012, Derian House Children’s Hospice.

For further information please contact:

Anthony Fisher, Managing Director and Insolvency Practitioner

Tel: 07940 250810 email: a.fisher@focusinsolvencygroup.co.uk

Notes to editors:

• Focus Insolvency Group provides tailored, specialist advice and guidance to Limited companies, sole traders, partnerships and individuals who are experiencing financial difficulties. Please see our websites www.focusinsolvencygroup.co.uk and www.debtproblemsuk.com for further information.
• Anthony Fisher heads the company with a wealth of experience in both Corporate and Personal insolvency. Anthony has worked within the insolvency profession for over 18 years, qualifying as an Insolvency Practitioner in 2006 and starting his own practice in 2007.
• Anthony Fisher comments on a wide variety of personal and corporate insolvency issues and is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association.

Press Release: Focus Insolvency Group strengthen their growing team

Focus Insolvency Group are very proud to welcome two new members to their growing family. Kimberly Evans joined the Wigan based team in the newly created cashier role back in August and Natalie Vose came on board this week as part of the expanding voluntary arrangement department.

Kim has worked in the insolvency industry for 5 years gaining a wealth of expertise in roles that have included various corporate insolvency cases.

She brings a keen eye and attention to detail when overseeing the business’ day to day finances in her role as cashier and often supports the voluntary arrangement department utilising her experience with creditors meetings.

Kim said:  “I have really enjoyed my first few months here as cashier, I feel I have gained lot of knowledge in personal insolvency in just a few months and I am looking forward to gaining more insolvency experience as part of the this very close team.”

Working in insolvency since 2006, Natalie has gained extensive knowledge in her previous roles working in some of the North West’ other top firms. She brings to her new position experience in all aspects of the voluntary arrangement process and will be assisting the current team advising and guiding clients through the voluntary arrangement process.

Natalie said of her new role: “I am looking forward to dealing with more complex cases and broadening my experience, and also gaining a qualification in Insolvency in the near future.”

Managing Director of Focus Insolvency Group Anthony Fisher commented on the new recruits: “A warm welcome to Kim and Natalie who join us with a wealth of experience within the insolvency industry. I am confident that they will prove to be valued members of the team and will perform well in their new roles.”

For further information please contact:

Anthony Fisher, Managing Director and Insolvency Practitioner

Tel: 07940 250810 email: a.fisher@focusinsolvencygroup.co.uk

Notes to editors:

• Focus Insolvency Group provides tailored, specialist advice and guidance to Limited companies, sole traders, partnerships and individuals who are experiencing financial difficulties. Please see our websites www.focusinsolvencygroup.co.uk and www.debtproblemsuk.com for further information.
• Anthony Fisher heads the company with a wealth of experience in both Corporate and Personal insolvency. Anthony has worked within the insolvency profession for over 18 years, qualifying as an Insolvency Practitioner in 2006 and starting his own practice in 2007.
• Anthony Fisher comments on a wide variety of personal and corporate insolvency issues and is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association.

 

Why you need a cash flow forecast

Profits are important and an obvious priority to any businesses; however cash flow management is the integral building block to the success and growth of that business.

Many business owners will put a lot of their time and interest into their profit and loss sheets but may overlook the important information that can be gleaned from the cash flow forecast. Profit and loss sheets do not contain all the information needed to predict how the business will do in the future, if it has the potential to grow and how it might overcome any problems. Even the appearance of a healthy profit and loss sheet could be masking a poor cash flow and papering over the cracks of a future problem, potential business distress, and eventually insolvency.

Profit is of course the difference between income and outgoings; however it only becomes income when a client pays, not when they are invoiced. You know when the client is due to pay but what if they miss the payment date meaning you do not have the money to pay your own invoices? How would your business cope with consistent late payers or a slow sales month? Will you have the surplus cash to invest in your next project or buy new equipment?

The answers to these questions can all be predicted by a well put together and concise cash flow forecast. It is no guarantee of future business performance as there a lot of different defining factors in cash flow management and each business is different, but it will give you the best possible idea of when and how money is coming into and going out of the business, when there might be surplus cash or gaps to fill. The more often you do a cash flow forecast, the more accurate it should become as you learn to read the information it provides.

No matter a business’s size or current position, cash flow forecasting is essential to the day to day running and in turn profitability of the business. They are not only vital for your own planning but will come in to play when seeking any kind of funding or investment. If you can present a well thought out cash flow to an investor or bank you are proving how much you understand your business and how invested in it and committed you really are.

Cash flow forecasts are usually composed on an annual basis but can be done 6 monthly or more often if required, depending on your businesses needs you could even do them daily.

If a cash flow forecast has flagged up the need to find extra finances in a certain month to bridge a gap then it can help you plan for this in advance rather than at the time. Businesses trying to secure funds ‘same day’ will come across as unprofessional and unorganised.

Use your cash flow forecast to run likely scenarios of future trading conditions and events and how your business would fair. You can then put contingencies in place to deal with them if and when they arise.

A good cash flow forecast is an essential document, treat it with high regard and seek professional and impartial advice immediately if predictions indicate cash flow problems or businesses distress.

For more advice on what to do if you are suffering cash flow problems, get in touch today or ask your questions in the comments section below. You should consult your own accountant regarding cash flow forecasts but we can also point you in the right direction for advice on writing and maintaining a cash flow forecast.

Press Release – Focus Insolvency get muddy for charity!

Focus Insolvency Group complete 5K mud run in aid of Derian House Children’s Hospice

Focus Insolvency Group are proud to announce that nine of our team competed  in the X-runner Wild Thing mud run and obstacle course on Sunday 23^rd September raising an impressive £530 so far, for our charity of the year; Derian House Children’s Hospice.

The team are delighted to repeat the success they had raising money for Derian House back in May when four members ran in the Bupa Great Manchester Run for which they raised a massive £645.

Derian House provides care and assistance to terminally ill children and their families, ensuring that they are able to lead as normal a life as possible during their illness, Focus Insolvency Group are honoured to support such a worthwhile cause within the local community.

Wild Thing obstacle race has been hailed as one of the toughest challenges in the race calendar and was completed by Anthony Fisher, Emma Fisher, Andy Platt, David Bottomley, Jean Bottomley, Frank Spear, Anne Whittle, Angela Rosler and Michelle Corcoran who all posted impressive times.

Our online sponsorship page is still open if you would like to help us support Derian House.

Anthony Fisher, Managing Director at Focus Insolvency group commented on the event:

“It was a good fun day, enjoyed by all but a hard challenge to complete and all staff had put a lot of preparatory work into getting fit and ready for the event. Luckily the rain held off on the day and much needed money was raised for our charity. We are now in planning for our next event, but we’ll leave the mud running behind for the winter.”

For further information please contact:

Anthony Fisher, Managing Director and Insolvency Practitioner

Tel: 01257 257037 email: a.fisher@focusinsolvencygroup.co.uk

Notes to editors:

• Focus Insolvency Group provides tailored, specialist advice and guidance to Limited companies, sole traders, partnerships and individuals who are experiencing financial difficulties. Please see our websites www.focusinsolvencygroup.co.uk and www.debtproblemsuk.com for further information.
• Focus Insolvency Group support local charities and take part in various fund raising events throughout the year.
• Anthony Fisher heads the company with a wealth of experience in both Corporate and Personal insolvency. Anthony has worked within the insolvency profession for over 18 years, qualifying as an Insolvency Practitioner in 2006 and starting his own practice in 2007.
• Anthony Fisher comments on a wide variety of personal and corporate insolvency issues and is licensed to act as an Insolvency Practitioner in the UK by the Insolvency Practitioners Association.