Insolvency Practitioners save jobs!!

24th April 2010
I saw a news item recently which put rather a different slant on the work of the insolvency profession. It commented on research from ComRes that suggested over 2 million jobs had been saved by Insolvency Practitioners (IP’s) over the past year and nearly 6,000 companies rescued.

Grim+Reaper.gifWorking closely with the Insolvency profession as we do with our turnaround work, we are very aware that IP’s are constantly struggling, as are Turnaround Practitioners, to change the perception of being the Grim Reaper! However, it goes further than that as there is absolutely no doubt that the earlier that a distressed business seeks help the much better the outcome. There are more options available and most of them are much more palatable than those which might still be there when matters are near the bitter end!

If the preverbal British stiff upper lip was allowed to relax would business owners and managers seek external help earlier if things are not going as they would like? I do wonder. Somehow the perception the surrounds asking for help, especially from insolvency and turnaround professionals, needs to change if British businesses are to gain from the significant benefits that can be had from early intervention.

Like many operating in the turnaround and distressed environment we have been surprised by the lack of businesses seeking help. Many have no doubt muddled through with help from schemes such as the Time to Pay arrangements from the HMRC’s Business Payment Support Service (indeed we have used it extensively on behalf of our clients), and the reluctance of banks to foreclose. However, in the long term this is probably not the solution for many. Whilst we may not have seen as many new situations as we might have expected we have been very busy intensively managing the position on a number of existing clients who for all manner of reasons (most not of their own making) have struggled in recent months. There can be little doubt some of these might have failed by now if it were not for the intensive care that our systems and processes can provide.

Traditionally the failure rate of businesses is higher coming out of recessionary periods. If businesses are to survive in the long term they must have strong financial controls and processes, and good quality timely and relevant management information from which to make decisions. There is no doubt it is this, not deals with the BPSS or the banks, that has ensured our clients have survived over the past months.

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