Steering clear of insolvency

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Running Time: 9:46

Date: 01/05/2014

Recognise the early signs of insolvency in a business to ease the burden later on.

We all know it's an offence to continue trading a business when it's insolvent, and failure to act early can have personal ramifications for directors. And Narelle Ferrier, Technical Director of the Australian Restructuring, Insolvency and Turnaround Association, has some reminders for you and your clients about the early warning signs of insolvency.

Businesses should be aware that delaying payments like GST, PAYG and super could signal to the ATO that they could be in distress. And it's not just their own cash flow your clients should be concerned about. Changes in payment terms by a client's supplier could indicate they're having difficulties - and that's a red flag if your client has come to rely on them.