Financial loss and business disruption is inevitable for a number of suppliers and subcontractors who will be hit by the collapse of Carillion. We encourage all business owners to contact us to review how this business tragedy will affect their own business. We can then help each business to prepare a plan to protect their financial and trading stability.
Most business owners will be familiar with the liquidation process, but very few will have encountered such a large business failure. At this time, it is unclear how long the liquidation process is likely to take, and equally unclear how much money is likely to be returned to trade creditors. Because profit margins are so narrow for most sub-contractors, any cash-flow loss or delay could have serious consequences. Some sub-contractors will need additional funding, and others may need to restructure.
Directors will be aware of their duty to consider the financial consequences of such large-scale disruption. If you are concerned about the on-going viability of your company, you must respond to your increased duty as a director and do everything possible to minimise losses to creditors, otherwise you face personal liability.The plan for your business may require fresh discussions with your banker in order to secure extra working capital. That will also entail the production of new cash-flow forecasts and possibly a revised management plan.
ad+ has extensive experience of the construction sector, and has advised many subcontractors about business and financial planning issues. Please get in touch to arrange a no obligation discussion with one of our chartered accountants who can help you to review the situation and prepare an optimum plan for your business.