Always stay in the flow: our four part series on liquidity management
How does the company's financial stability currently look? An uneasy feeling has to be taken seriously at the latest and should prompt a comprehensive review. If significant arrears have built up and reminders are piling up, it may already be too late. Once a company becomes unable to pay, corporations and partnerships without a personally liable partner are automatically obliged to file for insolvency under section 17 of the German Insolvency Code. Under those circumstances it becomes difficult, if not impossible, to save a company from closure.
Why checking in good time is unavoidable
Our daily work shows that many companies only engage with their liquidity management once the problems are already well advanced.
Securing the ability to pay should, however, be a firm part of business steering. At the latest when the first negative signs appear, it has to be a compulsory item for managing directors. That way the company knows whether it is obliged to file for insolvency and avoids liability risks. A company's ability to pay is examined in a multi stage analysis.
Would you like an insight into how we carry out such a review?
Here you can find our whitepaper on the liquidity check. Interested? Download it now:
You can find part 2 of our series here: part 2, punctuality
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