1. The bank balance is in a trend of decline.
2. The number of days it takes to collect money from customers began to increase.
3. You will not be able to pay suppliers owe money on time. Some of them could halt the delivery of supplies to you until you pay what you owe. This can cause serious operational problems. For example, if you can not pay for goods that are needed to fill orders!
4. In more chronic cases, you'll be struggling to pay creditors essential, as payroll tax and sales tax or VAT on time. These types of creditors are governments, and not accept it. At this point, your company May be in danger.
5. The end of the line is generally unable to pay wages on time or if a supplier presents a court order liquidation of your company.
The main difficulty if your company is or becomes in this situation is your loss of control as owner. If you recognize any of these symptoms in your business, you must investigate and take action immediately.
The situation of insufficient liquidity is known as overtrading. The causes may be the result of negative events, such as continuing losses, the insolvency of a major debtor, or overhang, but they can also be caused by too rapid expansion.
Prevention is always better than cure, so it is better to install early warning systems using your accounting software and management information reports to prevent the situation developing in so far as that.
Calculate the speed with which your company can develop without the need for additional financing. And be sure to begin to fund the additional supply if growth exceeds that limit.
2. The number of days it takes to collect money from customers began to increase.
3. You will not be able to pay suppliers owe money on time. Some of them could halt the delivery of supplies to you until you pay what you owe. This can cause serious operational problems. For example, if you can not pay for goods that are needed to fill orders!
4. In more chronic cases, you'll be struggling to pay creditors essential, as payroll tax and sales tax or VAT on time. These types of creditors are governments, and not accept it. At this point, your company May be in danger.
5. The end of the line is generally unable to pay wages on time or if a supplier presents a court order liquidation of your company.
The main difficulty if your company is or becomes in this situation is your loss of control as owner. If you recognize any of these symptoms in your business, you must investigate and take action immediately.
The situation of insufficient liquidity is known as overtrading. The causes may be the result of negative events, such as continuing losses, the insolvency of a major debtor, or overhang, but they can also be caused by too rapid expansion.
Prevention is always better than cure, so it is better to install early warning systems using your accounting software and management information reports to prevent the situation developing in so far as that.
Calculate the speed with which your company can develop without the need for additional financing. And be sure to begin to fund the additional supply if growth exceeds that limit.
