Official figures published earlier this month suggested that the number of corporate insolvencies had peaked late last year. But the reports from administrators and receivers suggest that insolvencies are rising as banks and the ATO take a harder line with those debtors who are showing little progress on the reduction of debt outstanding.
Where does this leave you?
If you have a debt with the ATO contact them now to take advantage of the offer by the ATO to not charge interest on the debt outstanding – See http://www.ato.gov.au/businesses/content.asp?doc=/content/00196536.htm for further information. This offer expires on 30th June 2010.
If you have a debt with your bankers talk to them – but be prepared! Show them your business plan – including cash flows – and explain how the business will progress over the next twelve months. If they agree to a proposal, keep them informed on a monthly basis as to how you are travelling against your forecast that you provided – irrespective of good or bad monthly results.
Cash-flow is critical as we come out of a downturn – update your cash-flow forecast at least monthly – if cash flow is critical you need to do this for a rolling 7 day period.
If you need assistance call Mike Harding now on 0401 63 904. As an elderly partner once said to me a few weeks after I started my accountancy training with one of the big 4 practices – ‘Don’t kick a client when he is down…..He may well get up again!’ We are here to help.