Business Rescue

When you're under pressure from creditors, battling to find the cash to pay wages on a Friday to save jobs, trying to keep your overdraft within its limits, and standing alone in your efforts to save your company from disaster, it is very easy to take the wrong turn

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Performance Improvement

Performance Coaching has been shown to be to the most effective way to improve operational performance in virtually any environment, since it is based on principles that are universal and leads to a direct impact on profitability.

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Corporate Advisory Services

Specialists at deal evaluation we offer business and commercial skills acquired over many years. Our advisory services are designed to assist overworked and busy executives make the right call on the numerous deals that cross their desks every day.

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Key Indicators of Insolvency

A quick reference check list of insolvency warning signs

Directors have a duty to ensure that their company does not trade whilst insolvent. A key test of a company’s solvency is whether it will be able to pay all of its debts as and when they fall due (not overdue). There must be reasonable grounds to expect that funds will be available and within the appropriate time frame, e.g. from increased (net) revenue, asset sales, capital raising etc.

If the answer to one or more of these is ‘Yes’ it may be cause for concern and potentially insolvent trading.

Working capital deficient Ensuring current assets are at realisable value and not overstated
 
Incurrence of trading losses 
How is the loss funded – delaying or non-payment of creditors, injection of share capital etc?

Demands/legal action by creditors e.g. overdue statements, collection agents, Statutory Demands

Non/late lodgement of GST and other taxation returns

SARS issues late/overdue notices against company

SARS issues Director Penalty Notice on Director’s home address, rendering director personally liable

Company has entered into repayment arrangement with SARS or other creditors

Statutory creditors not paid on time, e.g. PAYG, Superannuation, GST, payroll tax

Suppliers have stopped supply or insist on COD terms. Change of supplier? Why?

Creditors being paid in part payments (round sum payments, cheques drawn to cash, etc.)

Insurance premiums unpaid or insurance non-existent or inadequate
 
Default on bank facilities

Opening second or alternative bank account

Accounting records poor or non-existent – deemed insolvency?

Sale/assignment of debtors (factoring or book debt loan) to generate instant cash

External accountant’s fees in arrears

Unpaid rent on premises or overdue finance contracts

Post dating of cheques

Cheques being dishonoured

Bank overdraft being exceeded (or cheques being withheld or recorded as unpresented until funds become  available)

Creditors outstanding beyond trading terms and increasing in value

Contact the Head of our Business Rescue Unit:

Alastair Macduff
+ 27 76 977 3066
+ 27 11 442 5494 


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