Monday, 24 November 2008

Impending Company Failure

I found this great post on Accountancy Web by Joan Yeadon where she highlighted her views on the key areas of financial stress to look out for - apart from our official credit score changes and monitor alerts - which may signify problems within a company.

  • Cheque signatory never there
  • Management changes/loss of key members of staff
  • “Re-organisations” in the accounts department delaying payments
  • Changes of bankers
  • Delayed payments
  • Simple non-payment
  • Round sum “on account” payments
  • Post-dated cheques
  • Bouncing cheques
  • County/High Court Judgements – especially from HMRC in respect of unpaid VAT or NI
  • Winding Up Petitions
  • Late filing of statutory accounts, annual returns, proposals to strike off, etc.
  • Serious accident/disaster
  • Business dependant on one or two key people
  • Falling profit margins
  • Dusty stock
  • Shabby/run down offices/workshops/plant and equipment/vehicles
  • Old technology
  • Legislative restrictions on business

While there is the odd exception - 'Falling profit margin' would be hard to find out and accidents can happen to the best run company - keeping a look out for this kind of event is critical.

Remember that our monitor alerts are completely free and this includes notifying you of the filing of CCJ's (County Court Judgements) against a company.