What accountants, book-keepers and their staff should be looking at

When a business tips into insolvency, it rarely happens overnight.

More often, the warning signs have been flashing for months, sometimes years, but no one has joined the dots.

As accountants and advisors, you and your staff are in the box seat. You see the books, the BAS, the payroll data, the creditor balances, often before anyone else does. That means you are in a unique position to spot trouble early, raise the flag, and give your clients a fighting chance to turn things around.

The courts have long recognised a set of indicators of insolvency (ASIC v Plymin [2003] VSC 123). These same indicators are what liquidators and judges rely on when deciding whether a company was insolvent.