When retained for a turnaround or workout client, the consultant's first priority and course of action will be to stabilize the company's financial and operational situation. Usually, this includes negotiating with creditors, lenders and the IRS to establish payment plans to immediately reduce negative cash flow. This will allow the company to maintain the business's operating ability while financial and operational controls are developed and implemented to regain profitable operations.
Since it is also usual in these situations that the company's financial records are in disarray it is often necessary to reconstruct, to the extent possible, basic financial data and statements to understand the root causes of the problems.
As part of the stabilization process the consultant will immediately direct attention to operations; again, with the objective of quickly reducing negative cash flow.
In those cases where it is not possible to stabilize the company through negotiations, it may be necessary to file for bankruptcy protection. In other instances it may be determined that this is an advisable course of action for other reasons. In any event, the consultant will coordinate the necessary activities with the company's attorney and CPA and take the lead in developing the reorganization plan to be submitted to the court.
Once the stabilization process is accomplished, project activities revert to the normal discovery and operational implementation stages: but at a much more intensive pace. At the same time the underlying financial structure of the firm will be addressed in an attempt to develop a sustainable basis for continuing operations.
If your business is experiencing profitability, cash flow and control problems let us show you how we can help you solve these problems. You don’t have to go it alone. Contact us for a free consultation.
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