Last week, ironically on “R U OK? Day”, I attended a presentation by Worrells Solvency and Forensic Accountants titled “Business Turnaround” which was focussed on how we can help our clients who find themselves in financial difficulty.
Unfortunately many business owners go through difficult periods in business, and often the difference between those who come out the other side, and those who walk away from their business, comes down to whether or not they ask for help. Those that seek qualified, professional help early, have a better chance at turning things around and trading their way out of a tight spot.
In most cases, the advice and support of your Accountant will help you through a difficult period, but sometimes the problem requires more specialist advice and that’s when your Accountant will work with a Solvency and Forensic Accounting Firm such as Worrells. The key message from the presentation last week was that there are advantages to asking for help early, so do not “put your head in the sand”. If necessary and appropriate, Voluntary Administration (VA) can result in the business being saved, the directors being protected, the employees remaining employed and creditors often receive a better return than under liquidation. The process is also quick – usually between 4 and 7 weeks. However, again the important point here is to be proactive and act early, as a VA cannot be utilised once a wind up order has been served on the company (usually by the ATO or a creditor).
Of course, no one wants to be in a position where we need to enter into any type of administration or liquidation. So what can you do to avoid this situation occurring in the first place?
In my experience, I have found that clients who seek advice, and review their financial position regularly (at least quarterly), operate more profitable, financially sound businesses. The diligence of regular financial reporting, and the professional support they receive, enables these owners to identify opportunities for profitable growth, and address any problems early, before they become insurmountable.
Just as “R U OK? Day” encourages us all to check in on each other, and speak up if we need help in our personal lives; I encourage business owners to speak up if they need financial help and support. Even the most successful businesses go through hard times, and in fact their success is usually built on how these challenges were handled and overcome.
If you need someone to talk to you about your business, please call our professional team at UHY Haines Norton on 4972 1300, we’re here to help.