Even when it is obvious that a company is in financial difficulty, it can be difficult to advise the directors. Most of the time, they will believe they can trade through the difficulties, perhaps with a little forbearance on the part of their creditors, or a new line of credit or two. But when is enough enough? And what happens if they make the wrong call?
On a practical level, there comes a point when the creditors will decide this for themselves, whether by stopping the flow of credit, enforcing security or starting insolvency proceedings. The instinct of most directors is to stave off the creditors as long as possible, and to treat that as averting i…
Read the full article at: https://www.accountancyage.com/2017/05/04/insolvency-when-is-it-time-to-accept-the-inevitable/