We live in a very uncertain world and there are many instances where a business cannot afford to pay its bills and with mounting debts, the situation can very quickly get out of hand. Once the employees’ salaries are not paid, it is time to call in the business recovery expert, who would certainly be able to appraise the business, and should the business be rescuable, a recovery plan would be put together and with expert implementation, it is hoped that the outstanding debts be paid in full and the business can continue to trade.
Individual Voluntary Arrangement (IVA)
An IVA is an agreement made with the creditors to pay off the debts within an agreed timeframe. It is a legally binding agreement that is sanctioned by a court and providing the terms are met, the creditors have no choice but to stick to the agreement. For a creditor, an IVA might be the best way to secure the outstanding amount and with some mediation, the IVA can be agreed as the best way forward.
Liquidation Choices
If in the opinion of the business recovery expert, the company should be liquidated, there are three ways this can be done. The first is called a Creditors Voluntary Liquidation (CVL), which is agreed by the directors and the creditors, the second is Members Voluntary Liquidation, whereby the directors agree to repay the debts within a specific time period. The final type of liquidation is called Compulsory Liquidation, which would be ordered by a court after a request by either the creditors of the directors of the company.
Business Restructuring
This is something every organization could benefit from, not only those in financial difficulty, and it would involve enlisting the help of a business rescue expert, who would take a detailed look at the way the company is administrated and can often identify the problem areas. Business management can take many forms and with little or no leadership, things can quickly go astray. If there is no one to keep an eye on the books, you could be losing money and not even know – a position many expanding companies find themselves in.
Effective Management Strategies
If it is the opinion of the business rescue expert that the current management structure is ineffective, then a new system of administration might be recommended. Spending more money that the company can afford is a common error and with a new management system in place, every penny can be scrutinized and cuts can be made. Managing a large business is all about effective delegation and without the right formula and key personnel, there can easily be internal problems and with an expert assessment of the current state of the company, you can make an informed decision on which direction to take.
If your business is not performing as it should and you do not know the reasons why call in a business recovery specialist to appraise the business and make a suitable recommendation before it is too late.
