Keep repayment promises realistic after the crisis.
A good month creates an ambitious promise
A signwriting business has kept its creditor arrangement for six months and now has a stronger order book. The owner offers to clear the balance early to put the crisis behind them. But the proposed acceleration depends on several jobs not yet completed. Before promising a new finish date, the owner needs to test whether the improvement is repeatable and clarify what an extra payment would actually change.
Distinguish a stronger trend from one good month
Compare several periods of actual collections and operating costs with the recovery forecast. Identify whether improved cash comes from recurring work, a one-off sale or costs simply postponed. Keep the existing repayment timetable visible while assessing the improvement.
Business.gov.au’s cash-flow statement guidance separates actual movements from forecasts. Label unfinished jobs and estimated receipts clearly instead of treating the new order book as cleared money for an early payout.
Compare acceleration with keeping the agreed schedule
Prepare a forecast for each option using the same operating assumptions. Show the cash retained for ordinary commitments and a plausible weaker collection period. Include any fees, interest or other consequences the actual agreement requires advisers to assess.
Ask the accountant about the commercial effect and obtain legal advice where financial distress or other creditors create concerns. Wanting the debt gone is understandable, but does not establish that the fastest repayment is appropriate.
Confirm what an extra payment would change
Ask the creditor for a reconciled balance and its proposed treatment of the extra amount. Would it reduce later instalments, shorten the term or leave the next payment unchanged? Have any revised schedule or payout terms recorded clearly before relying on them.
Do not promise a full release solely from your own spreadsheet. Check how fees, interest, security or guarantees are dealt with under the actual documents and get the required confirmation through the appropriate adviser.
Make the new promise only after the figures support it
If acceleration is workable, record the approved amount, date and the conditions reflected in the agreement. Give accounts the final schedule so an extra transfer is not followed by an unplanned missed instalment.
If collections weaken before a new promise is made, keep working from the existing arrangement and reassess. Where a commitment has already changed, contact the creditor promptly with evidence and seek advice; a revised internal forecast does not alter accepted terms.
Check the effect before promising an earlier finish
Compare keeping the current schedule with a realistically funded acceleration.
Confirm allocation, revised instalments and any payout or release requirements before making the new commitment.
Contact CRP about reviewing repayment proposals against the business’s trading position.