Is my company insolvent?

Prepare two separate views: money available against payments falling due, and a realistic valuation of assets against all liabilities. Include overdue tax, rent, wages and finance instalments. Add expected claims and future obligations rather than relying only on the last filed accounts.

A cash-flow forecast should show actual receipt dates. An invoice is not available cash, and a property valuation does not mean money can be raised before Friday’s payroll.

• Repeatedly moving supplier payment dates or exceeding agreed credit terms.
• Using money reserved for VAT or payroll deductions to meet ordinary bills.
• Making sales without enough working capital to complete the work.
• Missed loan payments, creditor demands or a threatened petition.

One symptom does not decide the legal position. A pattern matters, particularly where new orders increase the cash shortage. This can be overtrading rather than a lack of sales.

Not automatically. A viable operation may have a rescue route, but continued trading needs a defensible plan that considers creditors. Record the assumptions, funding and advice behind the decision. Where no realistic recovery exists, taking more orders or credit can increase losses.

Start with the current bank balance, an aged creditor list, expected receipts and any legal deadline. These provide a more useful first discussion than turnover alone.