ASIC publishes a useful series of educational materials around...

ASIC publishes a useful series of educational materials around insolvency. There’s even a Bingo Card that lets you tick the boxes as you go along. I get a score of about 15 - where do you get to?

from ASIC : What to do if you suspect financial difficulty.

If you suspect your company is in financial difficulty, get professional accounting and/or legal advice as early as possible. This increases the likelihood the company will survive. Do not take a ‘head in the sand’ attitude, hoping that things will improve – they rarely do.

Warning signs of insolvency include:
ongoing losses
poor cash flow
absence of a business plan
incomplete financial records or disorganised internal accounting procedures
lack of cash-flow forecasts and other budgets
increasing debt (liabilities greater than assets)
problems selling stock or collecting debts
unrecoverable loans to associated parties
creditors unpaid outside usual terms
solicitors’ letters, demands, summonses, judgements or warrants issued against your company
suppliers placing your company on cash-on-delivery terms
special arrangements with selected creditors
payments to creditors of rounded sums that are not reconcilable to specific invoices
overdrafts limit reached or defaults on loan or interest payments
problems obtaining finance
changes of bank, lender or increased monitoring/involvement by financier
inability to raise funds from shareholders
overdue taxes and superannuation liabilities
board disputes and director resignations, or loss of management personnel
increased level of complaints or queries raised with suppliers
an expectation that the ‘next’ big job/sale/contract will save the company.