SYMPTOMS
OF BUSINESS FAILURE YES / NO
1. Do you have trouble paying creditors by the due date?
2. Are you drawing but not issuing cheques? For example, do you hold off
sending the cheque until you have more money coming into the business?
3. Are you only drawing cheques against deposit receipts? This is 'when
we get paid, you get paid'.
4. Are you engaging in a deliberate strategy of frustrating creditor payments?
This might be where you claim you have not received an invoice to buy yourself
more time.
5. Are you engaging in the 'cheque is in the mail' syndrome where you claim
that a payment has been sent but through no fault of your own it hasn't turned
up?
6. Are your overdraft facilities operating outside the agreed arrangements?
Is your bank calling you to inform you that you have exceeded your overdraft
limit?
7. Is the bank returning your cheques - that is, are your cheques bouncing?
8. Do you increasingly have to use cash-on-delivery for your supplies?
9. Are your creditors stopping supply?
10. Are your suppliers enforcing their retention of title clauses to recover
stock?
11. Do you have creditors that have commenced action to place your company
in liquidation? Have you received a statutory demand for payment?
12. Are you running down stock levels below efficient operating capacity?
13. Are you failing to conduct reviews on your stock levels and identify
slow moving or obsolete stock items?
14. Are you having difficulty, putting off, or not paying statutory charges:
- Tax liability (GST and PAYE)?
- Employee superannuation?
15. Do you follow-up late paying customers only when it gets desperate?
16. Does it take more than 90 to 100 days (six to 12 months) for your customers
to pay you?
17. Is your business reliant on one or two customers?
18. Are you selling your goods or services at a substantial discount simply
to bring money in?
19. Do you have a high level of gearing? This is where a significant amount
of your cash is going towards loan repayments.
20. Are you widening your range of suppliers to obtain more credit?
21. Do you have rising work in progress that is not being billed on time?
22. Are your disputes with customers over contracts increasing?
If you answered yes to many of these questions in the survey above, then
it's time to get professional assistance. See your accountant or business
advisor today.
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