Insolvency

Simply put, solvency is perhaps the strongest measure of your business’s long-term financial health. It’s also the clearest way to gauge an understanding of your organisation’s reliability in the face of financial obligations.

When it comes to maintaining solvency, Bryant & Bryant feels it’s best to be proactive. As such, we provide you with the solutions and structures you need to protect your business in the long run and secure its growth over time. Conversely, if you find yourself in pre-insolvency, we can help you develop a financial cushion that will offer an alternative to bankruptcy. Again, proactivity is key.

So how best to remain proactive when approaching your business’s financial plan?

As a stakeholder, you know it’s essential to manage your business in the most effective and comprehensive way possible—especially when considering your legal and financial responsibilities. Stay ahead of the business curve and stem the tide of any downward trends by allowing Bryant & Bryant to keep you informed of your financial position at all times and to implement systems that simultaneously protect your assets and minimise your risk of personal exposure. Our suite of solvency solutions includes:

  • Overall planning for financial strategy
  • Asset evaluation and protection
  • Variance analysis
  • Detailed processes in the event of audits
  • Operational restructuring where necessary
  • Smart and consistent business reporting

Looking for further information? These frequently asked questions (and answers!) might be able to help.

The types of pre-solvency services Bryant & Bryant provides

In addition to the solutions overview above, Bryant & Bryant offers:

  • Comprehensive reviews of your financial records
  • Thorough processing and reconciliation of your organisation’s accounting data
  • Reviews of all of your business’s assets and liabilities
  • Reviews of any and all risks to personal exposure
  • Consultation for liaising and negotiating with the ATO

My business has seen a recent decline, what steps can I take to avoid insolvency?

First, your business must facilitate a thorough investigation of your current financial position and organize a review of all your records. Try and determine a reason for the decline.

Next, consider measures to help you gain a better understanding of all business-wide and personal exposures. Once you’ve made an accurate assessment of these risks, take steps to develop a strategy for overcoming these issues, such as:

  • Creating a new marketing campaign
  • Orchestrating a cost analysis and reduction plan
  • Authorizing a sales margin review
  • Investing in customer profitability analysis
  • Arranging financing or re-financing structures
  • Recalibrating payment arrangements

My company is in pre-insolvency. How can I best protect my assets?

Determine what, if any, personal exposure exists. (Exposure issues can include a personal guarantee or a director penalty notice.) Next, be sure to review all assets, business and personal, and assess your current position in terms of any liabilities. Once you’ve made a thorough assessment, take time to evaluate your current plan for asset protection and its effectiveness. If any problems are identified, consider potential options for restructure in order to maintain a more secure financial position.

When assessing my financial situation, how do I decide which creditors to pay first?

Under Australian law, payment plans that favor certain creditors over others may be “clawed back” should your company face liquidation (note that this applies to circumstances in which monies have been paid during a period up to six months prior to the liquidation). Accordingly, if your company finds itself under financial duress, you should be very careful about prioritising creditors and should also seek professional advice in this area before making any “preference” payments.

My business’s bank has threatened to appoint receivers. What should I do?

  • Be sure to establish clear and open lines of communication with the bank. Stay in touch with them until you can find an agreeable solution.
  • Review your position regarding assets and liabilities and consider whether this crossroads is an opportunity for financing or refinancing.
  • Personally assess the value of initiating actions towards insolvency such as voluntary administration or liquidation.

Can refinancing prevent insolvency altogether?

It’s always possible.  But be aware that prevention is subject to what equity you have available and is contingent upon whether or not it’s economical (or beneficial) to use personal assets towards your business.

How can we turn businesses around

Bryant & Bryant makes every effort to understand both your business and your current financial situation inside and out by:

  • Ensuring that accounting processes are carried out regularly in order to provide up-to-date and reliable financial records
  • Aiding in critical decision-making
  • Evaluating both your asset and liability positions to identify opportunities for asset protection and effective tax planning
  • Offering expert advice in business restructuring, should you need it

Call us today (03) 9600 1000

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