By the time a payment is missed, the warning signs have usually been flashing for weeks. Directors who learn to read them act early, when help is cheapest and options are widest.
Watch the buffer and the debtor days
A cash reserve that keeps shrinking, and customers taking longer and longer to pay, are two of the clearest signals. Track both. A rising debtor-day figure is often the first hint of trouble to come.
Notice your own behaviour
Leaning on the overdraft every month, delaying supplier payments, or feeling anxious opening the bank app are behavioural warning signs worth heeding. They usually precede the numbers turning bad.
Act on the signal, not the crisis
The whole point of an early warning is to act before the crisis. A quiet conversation with a creditor now, or a small cost cut, is far easier than an arrangement made under a deadline.
If the signals are flashing, talk to us early — it keeps every option open.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Spotting early warning signs of cashflow trouble, Early warning signs your business cashflow is under pressure, Warning signs your company may be heading for payment trouble.