September 8, 2011 – RSM Bird Cameron, one of the largest mid-tier accounting firms in Australia, highlights symptoms business owners should watch for to avoid insolvency.
According to RSM Bird Cameron the most common causes of insolvency include:
* under capitalisation
* poor financial control including maintaining inadequate records
* poor debtor management
* poor strategic management
* inadequate cash flow or inefficient cash use (cash burn rate)
* natural disasters or other unplanned business interruptions
* director disputes
* trading losses
* economic downturn
* industry restructuring.
Andrew Graham, national head of business solutions, RSM Bird Cameron, said, “It is important for businesses to be aware of the signs of distress before it is too late. By closely monitoring your business it may be possible to turn things around in time.
“Even more important is for businesses to have controls and processes in place to prevent the business becoming distressed in the first place. This includes financial, production, organisational, and marketing controls.” Read more ❯