What are indicators of insolvency in your company?

  • Statutory creditors not paid on time (ie. Superannuation, PAYG, GST, Payroll tax, income tax)
  • Suppliers have stopped supply or insisted on COD terms only and opened a new account.
  • Cheques are being dishonoured
  • Trade creditors outstanding past contract terms.
  • Insurance, does it exist; is it adequate and up to date?
  • The holding of cheques that are drawn but not sent.
  • Slow debtor recoveries (shown by an increase in debtor ageing) Accounting records in disarray. Simple financial information cannot be provided quickly.
  • Creditors being paid in part payments and regularly (ie. Round amount cheques, cheques drawn to cash, payment programs, post-dated cheques).
  • Evidence exists of contra deals with creditors in payments of accounts.
  • Creditors seeking to have goods returned for non-payment of account.
  • The company‚Äôs balance sheet shows deficiency
  • No access to alternative finance
  • Trading at a loss
  • The company has a working capital deficiency
  • Unpaid rent to landlord or unpaid lease payments to financier
  • Inability to raise further equity capital
  • Debt collection agency or legal action by creditors evident eg. Issuing statutory demands.
  • Not complying with terms of loan facility with bank, exceeding overdraft limit or have passed deadline to reach agreement with lender.