Key warning signs include consistently overdrawn bank accounts, reliance on the overdraft to meet payroll, delaying payments to suppliers, receiving solicitor’s letters or legal threats from creditors, falling behind on VAT or PAYE obligations, and directors personally funding the business. If you find yourself prioritising which bills to pay each week, or if your debtor days are increasing while creditor days are shortening, these are serious red flags. Addressing cash flow problems early — ideally with the help of an advisor — gives far more options than waiting until the business is on the brink of insolvency.
