"I did not see it coming." It is the sentence heard most often from business owners after a major customer goes bankrupt and leaves a pile of unpaid invoices behind. Yet a bankruptcy rarely comes out of the blue: months and sometimes years in advance, the cracks are already visible in the annual accounts and in the Belgian Official Gazette.
Many people only look at a company's Health score. If it is still at an acceptable level, they feel safe. But that score is calculated exclusively from the filed annual accounts. Between two filings it does not change, even if things are going downhill in the meantime. Real risk analysis therefore looks beyond a single number. These are the 5 signals you can check yourself, without a paid report.
A quick primer for readers new to Belgium: every Belgian company files its annual accounts with the Central Balance Sheet Office of the National Bank of Belgium, and every appointment, resignation or registered office move is published in the Belgian Official Gazette (Belgisch Staatsblad / Moniteur belge). Both sources are public, and both are brought together on Jaarrekening.be.
Signal 1: directors who leave
A company is run by people. When those people abandon ship, it is rarely a coincidence. The directors sit closest to the figures and are the first to know that the next annual accounts will be bad, or that the bank is cancelling the credit line.
The signal: one director retiring after ten years is normal. Two or three resignations within twelve months, especially of the founder or the person in charge of finance, without a clear successor being appointed, points to internal conflict or financial panic. Be alert Click through to the person page of the departing director: if you see a trail of earlier mandates at companies that went bankrupt, you know enough.
Signal 2: annual accounts filed late
The rules are strict. The general meeting must approve the annual accounts within 6 months after the end of the financial year. The company then has 30 days to file them with the Central Balance Sheet Office of the National Bank, so at the latest 7 months after the balance sheet date. For a financial year ending on 31 December: approval by 30 June, filing by 31 July.
The signal: does the company close its financial year in December, but do the figures only appear in November or December of the following year? This is a warning light A delay often means there is a dispute with the accountant, that the figures had to be "adjusted", or that there was simply no money to pay the bookkeeper. From the ninth month after the balance sheet date the National Bank also charges a late filing surcharge (a few hundred euros, rising), and a company that files nothing for three consecutive financial years risks judicial dissolution. A company that accepts those costs usually has a good reason to hide its figures. More details in our article on the filing deadline and the penalties for late filing.
Signal 3: a registered office move to a mailbox
Companies in difficulty sometimes try to make themselves unreachable for creditors and bailiffs. They do so by moving the registered office to an address where nobody is physically present.
The signal: does a construction company from the province of Antwerp suddenly move from its own warehouse to a business centre or virtual office in Brussels, just when the figures deteriorate? Then that is often a flight forward to dodge summonses. Two or three registered office moves in two years is a pattern you should not ignore. A move to larger premises with its own warehouse is of course something else entirely.
Signal 4: growing debts to the tax authorities and social security
The government is often the first not to get paid, long before the suppliers. The National Social Security Office (RSZ/ONSS) and the Federal Public Service Finance (the Belgian tax administration) do not send pressing reminders the way a supplier does, and a company gasping for air uses the VAT and payroll withholding tax it has collected as cheap bridging credit. This is the most powerful signal, but also the hardest to find.
Where to check: open the latest annual accounts through the "Financial statements" tab and look on the liabilities side of the balance sheet, under amounts payable within one year, for the line "debts relating to taxes, remuneration and social security" (code 45). Compare the amount over three financial years.
The signal: a company with a stable workforce normally has a stable code 45: that is simply the VAT of the last quarter and the withholding tax and social security contributions of the last month. If that amount rises year after year while turnover or headcount does not grow with it, the company is building up arrears with the government. Combine this with late filing (signal 2) and you have a strong indication that the cash has run out. If you want certainty, simply ask the counterparty for a recent social security certificate (RSZ attest): a healthy company provides it without complaint.
Signal 5: equity that melts away
Sometimes a company still makes a profit but is already dying. That can happen by selling the "family silver": disposing of a company building or machinery produces a nice one-off result, but the buffer shrinks.
The signal: suppose a company makes a -€50,000 loss, and the following year a €10,000 profit. That looks like a recovery. But if equity dropped from €120,000 to €80,000 in the meantime because a building was sold and a dividend was paid out, the company is eating itself. Equity that falls three years in a row is the most reliable predictor of a bankruptcy we know. If it drops below zero, the directors must trigger the alarm bell procedure of the Belgian Companies and Associations Code; read what that means for the buffer in solvency ratio of a Belgian company. If you want to calculate solvency yourself, use our health score calculator: it turns solvency, liquidity and profitability into a score out of 5.
Checklist: the 5 signals
| Signal | Where to check | Risk |
|---|---|---|
| Several departing directors | "Directors" and "Publications" tabs | High |
| Annual accounts filed more than 7 months after the balance sheet date | "Financial statements" tab | Medium |
| Registered office move to a mailbox or business centre | "Summary" and "Publications" tabs | Medium |
| Rising debts relating to taxes and social security | Balance sheet (liabilities, code 45) via the "Financial statements" tab | High |
| Equity falling 3 years in a row | "Financial ratios" tab | High |
What do you do with a red signal?
One signal is a reason to look more closely, not a reason to drop a customer. Two or more signals at the same time call for action. Adjust your payment terms: work with a deposit, shorten the payment term (Belgian law allows a maximum of 60 days between businesses, and 30 days is the default if nothing is agreed) and stop delivering on credit while invoices are outstanding. For existing customers with a large outstanding balance you can include a retention of title clause in your general terms and conditions, so that delivered goods do not end up in the bankruptcy estate.
Anyone who follows a company on Jaarrekening.be (Pro) receives an e-mail at every new set of annual accounts, director change or publication. That way you do not have to repeat the check manually every month.
Conclusion
You do not need to be a financial expert to protect your business. You only need to know where to look: the filing date of the annual accounts, the evolution of equity, the line for taxes and social security, and the publications in the Official Gazette. Look up a customer you have doubts about through the company search and go through the five signals. Want to dig deeper? Read also how to read a Belgian balance sheet.
