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’s 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.