Your solvency forecast relies on invoices customers are disputing
Assess collectability and timing evidence behind disputed receivables in opposition financial information.
Corporate Recovery Partners
01 / 06
The forecast assumes every invoice will arrive on time
A hypothetical director wants to oppose a winding-up application and provides a forecast showing enough cash from unpaid customer invoices. Several customers have disputed the work or amount. Before describing those receipts as reliable, give the adviser the disputes and supporting documents. The ledger balance is a starting point, not proof of when cash will be available.
List the invoice, due date, amount challenged and the customer's stated reason. Keep any undisputed portion separate where the evidence supports that distinction. Do not treat a minor query as rejection of the whole account, but do not hide a significant dispute in a general expected-receipts total. Preserve the correspondence behind the classification.
The Federal Court's winding-up guidance addresses solvency evidence where a company opposes an application based on an unsatisfied statutory demand. A lawyer must assess the evidence needed in the particular case. This article does not establish solvency or draft court evidence. Give the legal and accounting advisers the complete financial picture, including uncertainty about collections.
In the hypothetical example, a customer may accept an amount but propose paying after the company's other obligations fall due. Record that distinction. Ask what evidence supports the forecast date and what happens if it changes. Avoid converting an internal collection target into an external payment commitment or treating an unanswered reminder as confirmation.
Show the effect of delayed or reduced receipts for the adviser's review. If another funding source is proposed, identify its conditions and availability separately. Do not adjust assumptions solely to produce a positive closing balance. An honest sensitivity analysis helps advisers assess the position; a favourable spreadsheet cannot replace evidence that its assumptions are supportable.
Provide new payment confirmations, dispute developments and actual receipts promptly. CRP can help organise the commercial account information. The objective is a defensible factual basis for advice about the opposition, rather than a forecast that succeeds only because disputed invoices were treated as certain cash.
