Identify and Address Bankruptcy with an Outsourced CFO
Many businesses face bankruptcy and restructuring, and addressing these troubled businesses requires both financial expertise and decisive action. Every business needs to watch for customers and suppliers that could file bankruptcy, forcing you to write off receivables or do without materials or components. An Orlando outsourced CFO can monitor your customer base and suppliers, looking for signs that any of them are at risk for filing bankruptcy, including:
Erratic payment history and late payments
Excessive employee turnover and/or late paychecks
Changes in buying patterns
Investment in a declining industry or geographic area.
If one of your customers shows signs of distress and potential bankruptcy, a part-time CFO can take steps to minimize the financial damage to your company. A Chapter 11 bankruptcy allows the business to reorganize by restructuring and eliminating debts, keeping the business in operation. In these cases, your CFO can help make sure your company is named a critical vendor, meaning that you are essential to the bankrupt business’s daily operations and therefore owed payment.
As part of the restructuring, an Orlando outsourced CFO can analyze a troubled company’s liquidity, cash flow, forecasted earnings, and any underlying collateral to verify their ability to make payments as part of the restructuring agreement. If legal action is needed, your CFO can function as a trusted advisor to make sure you take any appropriate steps to recover the maximum value for your company.
In addition, an external CFO resource can help you develop contingency plans to minimize the impact of a customer or supplier bankruptcy on your business. By establishing alternative vendors that can move in quickly if needed, or keeping a close eye on cash flow and receivables, a CFO can reduce disruptions to your company. For more information about how an outsourced CFO can help you identify and address bankruptcies in your customer base or among your suppliers, contact CFO Strategic Partners at 407-426-8288 for a free consultation.