Running a business brings many challenges with it. You’re supposed to take care of many things at the same time and you’re expected to have a solution for everything. Some challenges aren’t as easily overcome as others, though. Business insolvency is one of the toughest challenges you can face as a business. Not being able to pay the debt you owe can get you into a world of trouble. Luckily, there are some solutions that can get you out of a tight spot while minimizing the consequences.
1. What if your payments are delayed?
Believe it or not, one of the most common problems that cause poor cash flow is delayed payments. The bigger the company you own is, the more likely you are to experience this problem. Each year, 30 billion pounds are held in delayed payments. You need to manage your invoices effectively.
This is easier said than done, though. Managing invoices effectively is very hard because there are simply so many employees to take into account. If you don’t have the staff to provide you with the support you need, you’re not likely to get things done adequately.
It’s always a good idea to hire someone to do these things for you. It might seem like a waste of money currently, but it can end up saving you a lot of cash in the future and improving your cash flow. A simple thing like this will help improve your cash flow significantly and will get you out of your rough spot soon enough. Delayed payments don’t have to be a sore spot any longer if you approach the issue responsibly.
2. Failing to pay HMRC on time
When loaning money from the HMRC, you’ll need to pay it back within a year. They are not going to tolerate it if you fail to pay them back on time. Meeting the time for payment arrangement is necessary. To make sure you’re not in a bad situation in the future, you should hire a professional to help you before you commit to a payment plan. This way, you’ll have some guidance and you’ll be more confident in your decision. As well as that, you’ll be much more likely to pay the debt back on time.
Remember that you should take taxes into consideration. Regardless of what kind of HMRC payment plan you choose, it’ll only be accepted in you understand all other taxes still need to be paid on time.
3. What if someone owes you?
If you’re not the one that owes the money but the one who’s suffering because others can’t pay their debts, you need to turn to professional debt collection companies. Your business depends on the money someone simply won’t pay back. Even though that money means something to them, it’s also very important for the progress of your business.
You no longer have to worry about not getting paid back with professional companies by your side. As well as that, you won’t have to deal with the irresponsible person who owes you because the professionals will take care of everything for you. The likelihood of getting paid back is higher when someone who seems to have higher authority than you approaches the person that owes you, too.
4. Not enough money to pay the staff
This is also one of the most common signs of company insolvency. It’s not just about owing banks and bigger companies, you also owe the people that work for you some compensation for their hard work and dedication. It’s evident you are insolvent if you simply can’t afford to pay your workers any longer. As well as that, you’ll notice you haven’t even taken a salary for yourself in a few months.
Instead of hoping a sale will come through and fix the situation, you’ll need to take action. It’s very rare that one sale will bring your business back to life and bring it back on track. Taking out a loan is probably the only solution you have right now. Use this loan to improve your business and invest in a marketing campaign that’s going to bring in more cash. This way, you’ll have the money to pay off the loan quickly while also having enough money to pay your employees and make some profit yourself.
As you can see, business insolvency doesn’t have to be impossible to deal with. Even though this means the end for many businesses, it doesn’t have to mean the end of yours. This is your chance to show yourself and others how resourceful you are and that you can do practically anything. If your business overcomes this hurdle, it’s going to overcome everything. We’re confident you’ll be able to pay back the money you owe and that you’ll thrive after you do.