Understanding the Role of an Insolvency Consultant

Monday, March 26th, 2012

Today it is even more common for businesses to find themselves facing economic hardship; everyone is feeling the pinch from the economic downturn. When a business can no longer sustain itself or their liabilities far outweigh their assets, the business is deemed to be insolvent. When it looks like a company is headed down this path an insolvency consultant may be asked to step in and guide the business to firmer ground, or to liquidation. These individuals specialise in insolvency, particularly the laws concerning it.

Assessment

The first thing an insolvency consultant is going to do is look at the business as a whole to determine if restructuring is a possibility. They will check into management backgrounds, assess the assets and liabilities, test the market and then work to come up with a viable solution that is in the best interests of all concerned.

Options

Once the initial assessments are complete, an insolvency consultant will then take you through which options are available to your company. There are several ways to deal with financial difficulties including bankruptcy, liquidation, restructuring and more. Which of these is best for your business will depend on many factors such as whether or not it is a temporary situation. If the market appears to be recovering and your company is not too stretched, you may be able to continue trading.

Example:
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What Is Voluntary Liquidation?

Sunday, March 25th, 2012

Insolvency In Ireland - What Is Voluntary LiquidationEven today, there are companies that find themselves in financial difficulty and file for bankruptcy.  This drastic step is often unnecessary because there are other options that can be taken. Bankruptcy should be a distressed company’s last resort, as the other options are a lot less severe on the reputations and credit ratings of the company directors involved.

The saying “It’s not over ‘till the fat lady sings” applies just as much to a distressed business as to an opera.  A distressed business may appear to be ready for it’s final curtain call, but a company director needs to get the best professional advice he can at this time.  An insolvency consultant can assess the full business situation and can often work out if the company can be saved, or not. But even if the insolvency consultant advises that the business is not in a position to continue trading, they can advise on the appropriate course of action to take to wind up the company. One such alternative action is Voluntary Liquidation.

Voluntary Liquidation Explained:

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How You Can Control Business Costs

Friday, March 23rd, 2012

How You Can Control Business CostsIf you want to protect your business from insolvency and bankruptcy, it is important to get business spending under control and keep it that way. Business costs can sink your company in very short order, and sometimes it seems impossible to keep these numbers down, particularly when you are trying to grow your business. However, if you will keep a few basic ideas in mind and employ some of the best minds available you can control business costs and keep your company afloat.

Ongoing

It may become necessary at any stage of the game to cut costs, adjust spending or otherwise revamp your company’s financial picture. This is particularly true when you are experiencing a down turn; however, you should realize that many businesses go bankrupt when things are going fine. Cost management needs to be an ongoing process and you should continually look for areas where you can save money.

Accounts

Do you have dormant accounts that see little if any activity? It is a good idea to shut these down and consolidate as many accounts as possible. You will save money on bank charges as well as prevent misappropriation of funds or the risk thereof. Wisdom also says you need to reconcile all open accounts on a regular basis watching for mistakes.

Are you getting the best possible rates on all of your business accounts? Do not be afraid to negotiate with your financial institutions for better rates than you are currently receiving. Businesses that have multiple accounts or have had a longstanding relationship with a bank are in the best position to receive this type of adjustment.

Manage Debt
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What Is Receivership?

Friday, March 23rd, 2012

Insolvency In Ireland - What Is ReceivershipWhen your business debts are continually growing and it seems almost impossible to pay your creditors, you can clearly see where your business is heading. Bankruptcy can appear to be the most likely outcome, but there is a better option – Receivership. Although you can find it incredibly difficult to allow someone else to have the overall control of your company, it would be difficult to find another alternative that can lessen the impact of your business’ decline.

But in order for you to prepare yourself and your business to enter into receivership, you need to first be able to understand the nature of Receivership, and how it works.

So what is Receivership?

Receivership happens when the bank, court or a secured creditor assigns an external person (known as the receiver) to take over the administration of a company. This outside manager will then replace the managing director of the business that has been placed under receivership, and this person will endeavor to find the best ways possible to pay the company’s debts in a limited amount of time.

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What Is Insolvency?

Wednesday, March 21st, 2012

Insolvency In Ireland - What Is InsolvencyBy definition, insolvency is the inability to pay a debt when it is due, and most businesses fear the idea of becoming insolvent Running a business isn’t all about earning money and spending the profits; it’s also about being able to pay back the people and institutions that helped start your business, and of course to pay your creditors in a timely manner.

Insolvency falls under two categories. The first one is cash flow insolvency, which happens when a business cannot pay its debts on time. The second category is balance sheet insolvency, and this happens when the business has greater amounts of liabilities than assets.

Filing for a bankruptcy is one possible answer when your business is insolvent, though it is by no means the best solution. When a person is served a bankruptcy order, that person will lose valuable assets such as properties, vehicles and stocks. While a bankruptcy order could mean the loss of your house, a minimum delay of a year may be granted.

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