Review materials committed to the client that just collapsed

The lost customer may leave materials behind

A major client enters liquidation and your business has stock, supplier orders and partially prepared goods linked to its projects. Establish what each item is and what commitments already exist. Do not assume everything can be cancelled, sold or moved to another job. Ownership and contractual questions need review alongside the immediate cash problem.

Build an item and order schedule

Imagine a joinery business holding timber and custom components for the collapsed client's fitouts. Separate general stock from items manufactured to a particular design. Record location, payment status and the relevant customer and supplier orders. Include goods already delivered to site rather than treating the workshop inventory as the whole exposure.

Preserve the supporting records

business.gov.au recommends secure storage of business records and backups. Keep purchase orders, customer payments, delivery dockets and agreed specifications connected to the schedule. Those documents help advisers assess ownership and obligations. An internal label saying client stock does not, by itself, establish who legally owns the materials or what you may do with them.

Source: business.gov.au: Record keeping

Check supplier options promptly

Ask suppliers what work has begun and whether an order can be changed or cancelled, subject to the agreed terms. Obtain written confirmation of any proposal. In the joinery example, cancelling a raw timber order may be different from cancelling custom machining already performed. Do not remove the liability from the forecast merely because you requested cancellation.

Assess reuse on the correct basis

If reuse or sale is being considered, get advice on entitlement and any required consent before acting. Check suitability for another project and the actual cost of adaptation. Do not count stock as readily available cash just because it has a purchase value. Specialised materials may have limited alternative demand or require further spending before they can be used.

Update both the claim and survival plan

Keep any creditor claim against the collapsed customer separate from decisions about your own purchases and stock. Give advisers the updated schedule and confirmed supplier responses. The review should identify realistic options and remaining exposure, rather than make the loss appear smaller by assuming every unused item can immediately be turned back into money.