Whether you own the business, serve as an executive or an accountant, or have recently gotten hired to help address dismal financial prospects, watching a previously successful business struggle with financial insolvency is hard. Thankfully, there are multiple options available to help your business regain control over its finances and move forward into profitability in the future.
Accountants, executives, owners and managers can all help implement policies or push for changes, like restructuring, that can take a floundering company and help it regain its financial equilibrium.
Debt negotiation with creditors can give you financial flexibility
Temporary downturns in income or productivity can happen to even the most successful business. It is how you respond to these changes in income and your ongoing obligations that will determine how successful the business is in the long run.
Creditors owed money by a struggling business will want assurances that they can receive some kind of repayment. If a business becomes totally insolvent and closes, they could lose out on their opportunity for repayment.
As such, creditors sometimes agree to reduced payments, deferred-interest or even renegotiating missed payments as a means of helping your company get over a temporary time of hardship. Such negotiations often require the help of an expert, such as an attorney, who can push for the best terms on your behalf.
Restructuring the business can help you reduce costs and increase profits
When businesses grow or merge, they can wind up with redundant positions, inefficient practices and a host of other problems that cost more money than they need to. Business restructuring often involves the careful analysis of every aspect of a business’s functions and finances in order to locate redundancies, eliminate excesses and put the business back on a path toward profit.
Restructuring often involves the termination or transfer of workers, which in turn necessitates legal guidance to ensure that your company doesn’t leave itself vulnerable to claims then wrongful termination or discrimination.
Bankruptcy can be a way to regain control of your business budget
There are multiple different forms of business bankruptcy, each of which offers different benefits for businesses dealing with different financial issues. Bankruptcy can offer several benefits for a business struggling financially in the short term, including the automatic stay on the collection of debts and the potential for a discharge after compliance with all of the terms set during the bankruptcy process.
As with restructuring or debt negotiations, legal guidance is often a critical aspect of a business successfully managing bankruptcy, as business bankruptcy is substantially more complex than personal bankruptcy.
