The cause of most insolvencies usually is down to a series of factors which impact cash-flow.

The effects of social media may have major consequences for businesses, especially those who have not prepared for the negative side of it.

Social media needs managing on how business may grow from its scope and exposure to new markets.

Companies, though, should be cautious in how it may turn and how then to react.

Employees often manage company profiles on social media. So what measures are in place for when someone leaves the company? Login codes will require changing.

Often circumstances other than dismissal, which require a disciplinary removal of the person, may occur. Usually members of staff prefer to leave under ‘amicable’ circumstances, rather than be presented with a disciplinary issue, then face a confrontation.

Problems arise when they leave with a grudge. Then this may lead them posting on the media about the company in a negative malicious way. They possibly may have started before their departure.

The impact on the companies standing in the marketplace and the ongoing trade may be devastating.

Preventing such action is required. It forms part of how you handle employment issues within your business and ensuring your HR department oversees responsibility for such matters.

Other external social media sources may pose a threat. We often read reviews on holidays, products we wish to purchase, restaurants and general services. They may influence us into deciding to buy them.

Claims made potentially are recommendations and ‘positive’ testimonials which are false. Further, in other situations, competition may have maliciously posted fake negative reviews. It is important to react and resolve this; otherwise, they may damage the business.

Profits are impacted. A primary result would be a negative impact on cash flow. The worst consequence of false-negative post is that the company may fall in insolvency. This effects Jobs over a grudge.

It would be best if you policed posts on social media on behalf of the company. Real-time social media means that damage can go viral instantly.

Identity may cause serious issues for businesses. A typing error may be the difference between your business trading along without trouble, then suddenly being accused of something on the internet it was not involved in, indeed not having any knowledge.

Points raised than could give insolvency concerns very quickly. Rather than wait and see if you can survive such attacks, you need to take advice.

Contact John Waller of HBG Advisory on 0800 612 5448. Advice today can avoid many issues which hopefully will protect jobs and prevent the company from entering an Administration or a Creditors Voluntary Liquidation.

Remember. Social media is perfect for marketing your business BUT understand how also it may work against your company.