NEW YEAR, NEW PROBLEMS?
There are several reasons why insolvencies can spike in the first quarter of the year. The rent quarter day falls on 25 December, but many companies defer paying their rent (rightly or wrongly) until January; the company may have been closed for as long as two weeks over Christmas with no money coming in and no work being done, while – conversely – staff may have been paid Christmas bonuses. On top of this, the quarterly VAT might fall due and all the regular monthly outgoings need covering as well. Hence, many companies come back after Christmas with very little cash and some pressing bills.
This is a good time to look at the company’s finances and its future plans. If it wasn’t possible to carry over enough cash from December, does the company need a strategy to spread its payments into February, or might it need a more radical solution? Are there other issues that have kept the directors awake at night over Christmas?
Herron Fisher Insolvency and Business Recovery offers a free, confidential consultation to help you assess the position. Prevention is better than cure!
Insolvency and Business Recovery
Tel 020 8688 2100