Peter Krejci From BRI Ferrier Explains; Communication Is Paramount In Preventing Insolvency
Once the howling has started from your creditors, communication is your only hope for survival!
“Early intervention, deal with the issues at hand and communicating with your creditors all leads to positive outcomes.”
Peter explains that he is a chartered accountant specialising in insolvency who has about thirteen years experience. He was trained at a major second tier firm in Sydney and from there he went on to form his own practise and flowing on from there BRI Ferrier was formed.
BRI Ferrier likes to specialise in particular industries and having this specialisation enables them to provide advice in regards to restructuring where they know the business intimately, they can provide the right advice to put the company back on the right track towards profitability. If BRI Ferrier doesn’t have a particular specialisation in an industry they will call in the help from someone who does.
Peter explains that he specialises in the retail sector and that the retail area has been under considerable distress during the economic crisis.
The law states that a company is insolvent if it cannot meet its debts as and when they fall due. Peter goes on to explain that it is not to difficult for a director of a company to recognise when he/she cannot meet its financial obligations.
Typically what you will get is pressure from various creditors where the terms of trade may be thirty or sixty days and if you’re not meeting those terms then you will get pressure, that includes the Australian Taxation Office or the companies solicitor.
Peter explains that no creditor wants to see a client of theirs go under and if you have been a good client for a number of years there is every likelihood that they will support you to a certain point however communication is the key and is absolutely paramount in these circumstances.
Early intervention, deal with the issues at hand and communicating with your creditors all leads to positive outcomes.
How important is cash flow with the businesses you deal with?
Peter explains that most people recognise that cash is king. A business can be travelling well and has all its working capital tied up in debtors and stock however it’s not much use if you cannot release that cash to be able to meet all your ongoing liabilities. Cash is absolutely paramount and managing your company’s cash position will ensure that you will be able to meet any financial liabilities.