Being chased by suppliers who are demanding money can be very stressful for company directors and business owners.
If your suppliers have already increased their credit terms from say, 30 to 60 days or more and you still haven’t paid them, then their warning alarms will have started going off.
At this point it’s highly likely they will already be moving things to the next stage to try and get their money from you.
This could be as simple as sending you a letter to getting a bailiff or a winding up petition arranged. Of course all this does is apply more pressure.
By just ignoring calls, emails and letters the problem won’t go away, and as with most things the sooner it’s dealt with the better, especially if you need your suppliers to trade.
There are few options that you could look at depending on your situation and cash flow…
Option 1
The first thing you could try is to see if you can negotiate with your suppliers. If you could clear any outstanding debt once you’ve received a payment then let them know; they may allow you to come to an arrangement to repay your debt over a longer period.
If the situation isn’t short term or your suppliers refuse to negotiate a payment plan, there are some other options available to you if you act quickly. It is better to have the situation under your control than let action be taken against you.
If the debt is with HMRC then you may be able to negotiate a time to pay plan
Option 2
If your company is still viable and you think that it can be successful once the cash flow is resolved, then you could look into a more formal way of repaying your debts which is called a Company Voluntary Arrangement (CVA).
In this case, a formal repayment plan is drawn up which gives you more time to pay. It will also protect you from your creditors – as long as you keep up with the repayments.
Option 3
If you feel that you don’t want to continue with your business, then another option is a Creditors Voluntary Liquidation (CVL). This is where you cease trading, and an Insolvency Practitioner will sell off any company assets to raise money to pay back to your creditors.
Next steps
If you need any help with dealing with creditor problems, or company financial problems get in touch with us today. You can call us on 0800 978 0380 or email [email protected]
Related Articles
We're here for you.
As a dedicated team of Advisers and Consultants our aim is to help you fix the issues and solve the problems within your business.
Find out more →
