In the business sector, time can make or break. It is a precious commodity that can determine the fate of your business. 

When financial troubles strike, taking swift action is absolutely crucial. And that’s where voluntary administration comes into play. 

But you might be wondering, how long does voluntary administration take?

In this article, we’ll explore the timeline of this process and highlight the importance of acting quickly and efficiently to rescue your business from the brink of collapse.

What Is Voluntary Administration?

Voluntary administration is a term that often pops up when a business is going through tough times. 

But what exactly does it mean? In simple terms, voluntary administration is like a safety net for companies facing financial difficulties.

It’s a formal insolvency process that allows struggling businesses to turn things around or wind up their operations in an orderly manner.

If you’re facing mounting debts, what happens in voluntary administration is that you can appoint an external administrator to take control and make critical decisions about your business’s future.

The aim is to provide an opportunity for the business to restructure its operations, negotiate with creditors, and potentially avoid liquidation. A lot of businesses 

Voluntary Administration Vs Liquidation

Voluntary Administration is a formal insolvency procedure that allows a company to continue trading while a qualified professional, known as a voluntary administrator, takes control of the company’s affairs.

The objective of voluntary administration is to develop a plan to restructure the business and debts to save it from liquidation.

Meanwhile, a Liquidation is the end of a business and all its affairs. When a business is liquidated, its assets are sold off and the proceeds are used to pay off its creditors.

How Long Does Voluntary Administration Take?

The voluntary administration process typically takes between 25 and 30 business days. However, this varies depending on the complexity of the business affairs and the number of creditors involved.

For instance, here are the factors that can affect the length of voluntary administration:

• The complexity of the business affairs – If a business has complex financial affairs, it will usually take longer for the administrator to assess its position and develop a plan to save it.
• Number of creditors – A business having a large number of creditors may take longer to negotiate a deal that is acceptable to all stakeholders.
• Disputes between creditors – If there is a dispute between creditors, this could also delay the voluntary administration process.

What to Do During Voluntary Administration

If your business is entering voluntary administration, you must be open to cooperating with the administrator and their team. 

They need to have a clear understanding of the business’s financial position and operations to develop a plan to save it. 

You should also be prepared to provide them with any information they need, including financial statements, contracts, employee details, creditor information, and any other relevant documents.

More importantly, you should note that during this phase, every passing day holds immense importance.

The longer the process takes, the more strain it puts on your business, employees, and stakeholders.

In some cases, delays lead to the loss of key clients, talented employees seeking other opportunities, and suppliers losing faith in your ability to recover.

So, you must actively collaborate with all parties involved to expedite decision-making and avoid unnecessary delays.

If you’re afraid of taking your business into voluntary administration, don’t be. You’re not alone. You can find list of companies in voluntary administration on the Australian Securities & Investments Commission (ASIC) website. This shows that this is a common and accepted process for businesses that are facing financial difficulties. 

Save Your Business Now.

Honestly, voluntary administration is not only a complex but also a time-sensitive process. However, it can be a lifesaver for businesses that are struggling financially.

It allows them to regroup, reassess, and potentially find a way to overcome financial difficulties.

If you want to save your business, you must be willing to explore all available options. Seek professional advice from lawyers or financial experts who specialize in insolvency matters. 

For swift and professional guidance, contact AVA Advisory today at 1300 181 220 or book a free consultation.

Our expertise and commitment to your business’s success can be the lifeline you need to turn things around.

Remember, it’s never too late to get your business back on track.