Typical situations
- Payroll, VAT or supplier payments are becoming harder to meet on time.
- Customers are paying more slowly than the business can fund.
- Overheads were set for a busier period than the company now has.
- Short-term borrowing is being used to cover recurring gaps.
Start with a reliable cash picture
Directors cannot make good decisions from a dated profit figure. A 13-week cash flow, an aged creditor analysis and a clear view of committed outgoings usually reveal more than a year-end set of accounts.
Once that picture exists, the options become easier to rank: accelerate receipts, slow or renegotiate payments, reduce overhead, pause non-essential spend, or look at working-capital support.
Cash flow and solvency are connected
A temporary timing issue is different from a business that cannot pay its debts as they fall due. The distinction matters because it affects director duties and the range of options still available.
If HMRC arrears, supplier enforcement or a statutory demand is already part of the picture, cash-flow work needs to sit alongside creditor pressure support rather than being treated as a bookkeeping exercise.
Construction cash is a different problem
Contractors and subcontractors deal with retentions, payment applications, pay-less notices and the knock-on effect of a delayed main contractor. Those issues are covered separately on our construction cash flow page, because the mechanics are specific to the built environment.
Common questions
When does a cash-flow problem become an insolvency issue?
When the company cannot pay debts as they fall due, or its liabilities exceed its assets, directors need to consider solvency and their duties more carefully. A short-term squeeze is not automatically insolvency, but it should be examined properly rather than hoped away.
Can refinancing form part of a cash-flow plan?
It can, if the underlying business can support the facilities and the funds are not simply used to delay a wider problem. Refinancing is one option among several, not a substitute for understanding why the cash gap exists.
Related services
Business turnaround
Stabilise trading, restore control and build a practical plan around the parts of the business that remain viable.
HMRC debt
Address VAT, PAYE and corporation tax arrears, including Time to Pay and the risk of HMRC enforcement.
Creditor pressure
Respond to supplier action, statutory demands and winding-up petitions with a plan rather than a series of short-term holds.
Restructuring
Reshape historic debt, the operating model or the company structure where the underlying business remains viable.
Related insights
Construction cash flow, late payment and retentions
How late certificates, pay-less notices and retentions create cash pressure in construction businesses, and what directors should examine first.
Options when a company cannot pay HMRC
A practical guide for UK directors when VAT, PAYE or corporation tax cannot be paid on time, including Time to Pay and the limits of informal arrangements.
