Insolvency is a state of financial distress, in which a business is unable to pay off its debts or outgoings on time, or in full. It is often considered bankruptcy for businesses. A company will be identified as insolvent when its debts outweigh its assets, or it can no longer pay its bills. But what happens when a company files for insolvency? And how do you qualify for insolvency?
When a company becomes insolvent, they call an insolvency firm. They will do this when they are at risk of becoming bankrupt to help them get back on their feet, or if the situation has gone too far and the company cannot recover, an insolvency practitioner will help them manage the insolvency process. The business then hands over all of its files and documents to the insolvency practitioner who will take control of the company, release the assets and distribute the funds to creditors.
Insolvency firms have two main functions:
The insolvency process focuses heavily on paper trails and there is a strict legal process that must be followed – which will differ depending on the circumstance.
You will qualify if you are on your way to, or in a stage of, bankruptcy. In some cases, businesses require a government-approved advisor to make their insolvency application.
Insolvency is a “state of being”. When a business becomes insolvent, they are unable to raise the funds to meet its contractual obligations or pay off debts at the time they are due. Whereas liquidation refers to the official, legal ending of a company, stopping them from doing business or employing any staff.
Insolvency firms have to deal with multiple cases at once – and with those cases come thousands and thousands of case files and documents, as well as compliance and regulations. That’s where the Virtual Cabinet insolvency management software comes in.
Virtual Cabinet insolvency management software integrates with many case management solutions, including Turnkey's IPS. The insolvency case management software manages the processes and cases, offering up all of the documents and forms that are required, while Virtual Cabinet imports them into the case file in the document management system. Essentially, IPS will manage the case, while Virtual Cabinet manages all of the documents within the case.
The company filing for insolvency might be paperless, so their files will be stored on CDs or servers, but most companies will have a mix of electronic and paper trails – meaning they need to be scanned and stored in one central location. Firms can scan the paper documents into Virtual Cabinet, which is then set up to help them manage their cases and case files.
When a document is scanned from any multifunctional device, Virtual Cabinet can bring it into a personal or group in-tray. Files are kept in a temporary holding area where changes can be made to files before they’re stored away – like taking away any blank pages, flipping the orientation, moving pages around and adding them in. You can also move files between in-trays and leave notes for colleagues.
Once the files are scanned, the Document Management System then automatically sorts them into the right places, eliminating the need for admin and making every document easily accessible for all involved. This means less time looking for lost files and more time spent on tasks that really matter. Virtual Cabinet's Document Management System is an integral part of many insolvency firms and our software is adaptable and customisable to your needs. By setting up rules and automatic filing systems, your file organisation is made easy. With a simple case filing system, we make it easier to comply with regulations and auditing requirements. There’s also a direct link between the case management software and Virtual Cabinet: click a button and the system will open up Virtual Cabinet with all of the documents for that specific case, making it an ultra-efficient system.
Virtual Cabinet uses OCR (Optical Character Recognition), which allows businesses to look for specific content across all documents, whether that’s a specific transaction, bank account number or date. So rather than sifting through 10,000 documents at a time, you can simply use the content search function for the word or phrase you’re looking for and bring up every file in relation to that query. The best part? It’s all sorted for you. Virtual Cabinet will OCR a document as you scan it into the system and file it in the appropriate case file. It’s that simple. You can also narrow down files by client name, file type, date and more. Your search functions are tailored to your specific needs and you can even save searches you use often, to reduce the time it takes for you to input the search information manually.
Insolvency firms are frequently audited to ensure they are compliant with regulations. Thanks to Virtual Cabinet’s auditing and version control functions, firms can provide a secure trail for each case file and document, allowing them to follow every crucial step of the workflow. We make it easy to bring the right documents to the surface at the right time.
Are you interested in using the Virtual Cabinet insolvency software for your business? Discover how our Document Management System can help you organise your case files in the most efficient way possible by booking a free demo today.