Insolvency Gold Coast On The Rise

Gold Coast companies are under growing financial stress from their customers extending the late payment of their accounts, sparking warnings from a peak body that they risk becoming insolvent.

Janelle Manders, Gold Coast Committee chair of the Australian Institute of Company Directors, said small to medium-sized enterprises (SMEs) were most at risk from the delays in payments.

Account payments are being delayed “It seems to be taking about a month longer than normal to settle accounts,” Ms Manders said. “This delay is putting a lot of pressure on SMEs on the Coast.

“It is easy for directors of SMEs to be consumed by the day-to-day operations of the company and fail to notice the warning signs.”

Ms Manders said SMEs and larger companies needed to ensure they had a ready supply of credit to cover debts that are dragged out.

“Companies need to be very mindful of their cashflows”, she said, “and ensure they know where their debtors are at.”

Ms Manders said the economic downturn would continue for some time yet. “There is no reason this situation will change anytime soon,” she said.

“So companies need to make sure they have a strategy in place to handle late payments and slow debtors.”

Ms Manders said it was also worth reminding directors they had a duty to avoid insolvent trading especially with the new Directors Penalty Notices “DPN” now in place

Company directors must ensure, as they deal with their company’s affairs, that they never allow the company to trade while insolvent, nor incur a debt that would lead the company to insolvency.

Insolvency issues and financial hardship is an ongoing problem not only on the Gold Coast but across Australia with the current Global finial crisis continuing to rise and politicians leading us in to deeper water this is not going to get better for a real long time.

If you are struggling with mounting debts and financial problems you need to contact Insolvency Professionals now help is just a phone call away.