Is company liquidation a threat that is starting to become all too real? This article will explain two simple steps you can take to avoid the threat of a company liquidation.

1. Identify opportunities where you can increase cash inflow

Too often, company directors are in possession of surplus stock or occupy surplus space. This means that they are missing out on opportunities to increase their cash flow and make a little extra income.

We recommend that all company directors evaluate their stock levels and other underutilized assets. If stock levels and underutilize assets can be sold, company cash flow will improve. Even if this is temporary selling excess stock or subletting surplus space will allow company directors to pay off company debts.

Another way to increase cash inflow is by ensuring that you are sending out invoices to customers immediately and enforcing a vigorous payment process to make sure you get paid in a timely manner. This may include setting up an automated system that sends out payment reminders and enforcing late or dishonour fees. This will act as a great incentive for your customers to pay their fees on time so that you do not need to wait for delayed payments which will really disrupt your cash flow.

2. Eliminate cash outflow where possible

While it is helpful to increase income in your company, it is also vital that you reduce expenditure where necessary.

Some ideas include:

• Moving to a smaller office with lower rent
• Reducing overhead costs
• Changing to a cheaper or more efficient electricity or telephone bill
• Cutting down on staff hours during quiet periods
• Shopping around for better deals with suppliers
• Evaluate your inventory control and ensure that you are not buying more stock than necessary

By following these two steps in your business operations, you can free up cash flow to repay company debt. Hopefully these measures will also help you avoid the threat of a company liquidation.

If you would like more information on company liquidation, then please contact Australia Company Liquidations. We are registered company liquidators who offer a FREE 24/7 hotline for Australian directors seeking expert advice. Please call us on 1800 981 070 now.