Seek advice and avoid the road to insolvency

Times of change create opportunities. This is the upbeat message from Ken Pattullo, senior partner with business rescue, recovery and restructuring specialist Begbies Traynor.

He believes that while the current economic climate will challenge the survival of some companies, for others it offers the chance to gain a competitive advantage.

“The problem we frequently encounter is that there are still too many businesses refusing to deal effectively with their financial difficulties, thereby allowing them to become potentially increasingly critical by the day, and consequently insolvency can become the only viable alternative,” he says.

One of the major challenges that Ken Pattullo and George Dale, director with Begbies Traynor, regularly face is to persuade chief executives and finance directors to heed the warning amber light and seek advice at an early stage.

“Catastrophe can then perhaps be avoided but once a winding up petition has been served then the chances are decidedly remote,” warns George Dale. “Wherever possible we help companies find the best solution which allows for positive steps towards financial recovery.”

Four all important strategies for survival from Begbies Traynor are:

* Manage cashflow very carefully.

* Ensure you have reliable and up to date management information available on which to base decisions.

* Ensure a robust credit control policy is applied and reduce exposure to poor payers.

* Plan effectively for different scenarios and don’t panic …but if you do panic, panic early!