If closure is being considered, show the costs of stopping as well as trading

Stopping does not remove every commitment overnight

The accountant warns that the company may be insolvent and closure is one option being discussed. Prepare the information an insolvency adviser needs about the practical consequences of stopping. Rent, unfinished work, employee matters and hired equipment may require attention. Do not assume the only comparison is today's trading loss against a future cost of zero.

Identify the activities that would need action

Imagine a contractor with two unfinished sites, rented premises and hired plant. List the work requiring protection, property to be accounted for and agreements needing review. Distinguish immediate safety concerns from proposed commercial decisions. Do not terminate contracts, dispose of assets or select payments merely because a rough closure list has been prepared.

Seek advice on the available options

ASIC advises directors to obtain qualified advice promptly if insolvency is suspected and explains duties concerning further debts. Give the adviser both the current financial records and the closure information. The guidance does not establish that an informal shutdown is suitable. A formal process or another advised course may be required, depending on the company's actual circumstances.

Source: ASIC: What to do if your company is insolvent

Support the estimates

Use agreements, payroll records, hire schedules and professional input to identify likely commitments and uncertainty. Label estimates and avoid inventing employee or lease termination amounts. In the contractor's example, plant collection and site protection may involve different arrangements and responsible parties. Ask the adviser which information is useful and which figures require further specialist assessment.

Keep alternatives comparable

Show the obligations remaining under each option without assuming all old debt disappears when operations stop. Avoid counting the same cost twice under different headings. Explain any dependency, such as access needed to collect hired equipment. The purpose is to support a realistic options discussion, not to build an alarming total that forces the adviser towards continued trading.

Act only on proper instructions

Record the advice and authorised next steps, including urgent actions and the people responsible. Keep financial information updated as circumstances change. A factual shutdown assessment can reveal commitments that would otherwise be overlooked, but it is not permission to keep incurring debts or to close informally. The decision needs to be made with the company's duties and actual position understood.