Insight
Managing a cashflow crisis
A cashflow crisis is frightening, but panic makes it worse. The aim in the first days is simple: establish the facts, protect what matters, and communicate early.
Important
Turnaround Toolkit cannot determine whether a company is solvent or insolvent or whether continuing to trade is appropriate. If you are unable to pay debts as they fall due, have received formal demands, or are concerned about your duties as a director, seek prompt advice from an appropriately qualified insolvency/restructuring professional or solicitor.
Establish the cash position
Write down opening cash, expected receipts and expected payments for the next four to eight weeks. You cannot manage what you cannot see.
Protect the essentials
Identify the payments that keep the business running — payroll, critical suppliers, key obligations — and protect them. Pause discretionary spend immediately.
Accelerate collections
Focus collection effort on the largest, most current debts. A short, polite, consistent chase sequence recovers more than people expect.
Communicate before you are chased
Contact HMRC, lenders and key creditors with facts and a realistic plan. Silence almost always makes the situation harder.
Know when to seek help
If the company cannot pay debts as they fall due, or you are concerned about your duties as a director, obtain advice promptly from an appropriately qualified insolvency or restructuring professional. This is not a sign of failure — it is responsible action.
Related tools & resources
More insights
Turnaround Toolkit provides practical planning tools and guidance for UK business owners. It does not determine solvency or insolvency, and is not a substitute for professional legal, insolvency, accounting or financial advice.