The liquidation of Carillion has made headline news this week, potentially putting thousands of jobs at risk. Unfortunately the executive team were unable to secure the financial support required to action its revised business plan.
Carillion’s demise may also cause a domino effect for many other companies, sub-contractors and individuals that are linked to suppliers of this first tier contractor.
How would the liquidation of a supplier or contractor affect your companies’ cash flow? Many businesses are un-prepared for these circumstances, however this does not need to be the case as Howard Worth’s Head of Corporate Finance, Christian Goulding explains.
“We would advise clients to be prepared for the impact that a supplier entering liquidation or administration could have on their business before it happens. There are various options that can be put in place to safeguard your company’s cash-flow. Specialist credit insurance can be taken out to cover any non payment by companies that have ceased trading; invoice factoring could be put in place or restructuring company debts. However one of the most effective ways to ensure your business can continue to trade in difficult periods is to produce a cash flow forecast.
Clients we work with find 13 week cash flow forecasting extremely useful as it give an accurate analysis of trading performance over a full business cycle and enables them to plan and manage their business finances effectively”
If your business has been directly affected by Carillion’s liquidation or you have any concerns regarding your business’ cash flow and would like to discuss your options please contact the Corporate Finance Team on 01606 369000 to arrange a confidential, no obligation meeting.