Only those who can pay all their bills on time are considered solvent. That is why it is crucial for every company to always keep an eye on both: the amount of the obligation AND the due date. Both pieces of information must be reliably processed in the accounting system. Only then does a business know its current liquidity status. This allows it to recognize in good time if payment problems are looming or if insolvency is even a risk.
However, our experience shows that this important data is often not fully available. In many cases, there is then no time to make up for the information deficit—with far-reaching consequences. The liquidity status is the mandatory foundation for all further financial planning.
How solvent is a company? Determining the liquidity status
We determine your current liquidity status by assessing your financial position. The calculation on the reporting date follows a simple principle: all available liquid assets are compared against all outgoing payments.
However, given the sheer volume of data and the multitude of factors involved, this determination can be very complex. First, THE MAK'ED TEAM ensures that all data is available. That is why the very first question is: Is your accounting and finance system up to date? Has everything been booked and evaluated? Where does the data on receivables and payables come from? If you outsource your bookkeeping, we check whether all data has been transmitted in an up-to-date and secure manner. Only when all information on incoming and outgoing payments is recorded on a daily basis can we determine the liquidity status and assess whether further audit steps are necessary.
Would you like to learn more? Here you will find an overview of how we determine the liquidity status.
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