Business Insolvency In A Pandemic World
By Bryan Williams of BWA Insolvency
The economic effects of the COVID-19 pandemic have seen an increase in demand for insolvency services. We believe this demand will only increase over the next few years.
While New Zealand hasn’t seen the anticipated business failure that was predicted in early 2020, this is largely because the government has been propping the economy up.
We’ve seen many companies adapting well to the new business environment, showing a Kiwi can-do attitude in their willingness to be flexible and change.
There’s no doubt that certain sectors of the economy have suffered more than others in the past year. But the companies that will struggle to survive as the level of government support lowers are those who were already dealing with underlying issues before the pandemic. Many of these companies would have eventually failed – the effects of the pandemic simply hastened their demise.
Although general conditions will have an effect on companies within a particular marketplace, insolvency is usually associated with the shortcomings of the management of the company. The environment in which a business trades is relevant, but more important are its internal dynamics. How robust are its accounting processes? Have resources been invested to maximise returns? How well have records been kept?
If a company is struggling, there is a legal process that is designed to help. It’s called voluntary administration. It’s not an easy process – it requires a level of commitment from all parties involved in a company. But if there is any chance for a struggling business to survive, voluntary administration is the way to do it.
Acting early is the key to helping a business through voluntary administration – don’t wait until it is too late.
BWA Insolvency are experts in voluntary administration and all aspects of insolvency. Contact us today for a confidential chat about how we can help your business.