Are All Insolvency Practitioners the Same?
7 Factors That Make a Good Insolvency Practitioner
When a company is experiencing financial distress it will often find the help, advice and guidance that Licensed Insolvency Practitioners can provide to be invaluable. We’re here to assist directors and managers of businesses turn a corner, improve cash flow and as a result return to profitable trading. But what makes a good insolvency practitioner? Aren’t All Insolvency Practitioners the Same?
The answer, of course, is no. Our team of Licensed Insolvency Practitioners, from across our 4 offices (London, Brentwood, Salisbury and The Cotswolds), know that track record, technical knowledge and financial expertise is central to any appointment. Indeed, these areas should be a given, especially because of the demanding requirements of the professional qualification. However, there are seven other factors which we believe are crucial in choosing the right insolvency practitioner for a job. They are:understanding, communication, trust, optimism, experience, approachability and availability.
1. Taking Time to Understand a Business
All businesses are different and the need to understand them and how they work is always our starting point. This is true even though many of the problems that they encounter are the same. These include: cash flow problems, difficulties in paying HMRC and other creditors, problems with raising additional finance and late payments.
A good Insolvency Practitioner will be patient and take the time to discover and understand the underlying issues that may be causing a business’s difficulties. Without understanding the specific problems faced by a business it is impossible to offer the right solution, tailored to the business’s needs
2. Good Communication
It’s no good identifying the practical – and right – course of action for a business if the Insolvency Practitioner cannot communicate it effectively to the directors, creditors and other stakeholders. This means, therefore, using jargon-free plain English for one thing.
A good IP should always be clear when explaining to directors why it would be appropriate to take their advised route. Consequently, directors will understand what will happen in practice and have no nasty surprises further down the line.
3. Gaining Trust
Due to the nature and sensitivity of their duties, it is vital for Insolvency Practitioners to be open and honest in all their dealings. The importance of the task at hand, the outcome of which impacts on jobs and livelihoods, requires complete transparency and integrity.
A good IP, therefore, must gain the trust of all key parties. As a result, this will assist the directors to achieve the best possible outcome.
A good Insolvency Practitioner will keep business rescue and turnaround at the forefront of discussions, rather than seeing liquidation and closure as the only options.
Identifying a range of potential options based on a thorough review of the company’s operations, could help to turn the business around and aid the company’s return to profitability. Keeping an optimistic mind-set can help a great deal at this stage.
Often, a different source of funding can be the key to recovery. Insolvency Practitioners usually have connections with a range of finance providers who can offer alternatives to mainstream funding that businesses in distress might not have heard or thought about. These include leveraging the value of hard assets or sales ledger invoices, for example.
5. Sector Specific Experience
We strongly believe there are additional levels of understanding that only previous sector specific experience can provide. Such specialist experience can help an IP to identify the causes of a business’s difficulties more quickly and accurately, allowing the right solution to be put in place.
Experience helps in knowing what to look for and knowing what to recommend. For example, optimising a company’s cash flow and credit control procedures may be all that is needed to improve liquidity and help the business back to its feet.
6. Being Personable and Approachable – as Well as Professional
A good Insolvency Practitioner will understand the ramifications for directors of any creditor action, and how it could impact on them as individuals. For that reason, an IP needs to be approachable, and open to answering as many questions from directors as required.
It’s about being willing to spend time explaining each stage of a suggested process, including any potential ‘stumbling blocks’ for directors such as personal liability or accusations of wrongful trading. In a financially distressed environment we always aim to make the whole situation easier to bear.
Being personable and approachable means that we always have empathy for the stresses and strains experienced by directors. We try to deal effectively with the creditors and negotiate the best possible outcome given the circumstances.
When a director requires advice because their company is in financial distress, they are often in a distressed state too. As a result sleepless nights are common. This means that when a director finally seeks advice, it can’t wait. Our availability is vital, which is why we are always available for a free of charge initial consultation, without obligation:
- On the phone 0207 831 1234
- By email – firstname.lastname@example.org or
- In person
Contact our London Insolvency Practitioners for an Initial Free Discussion
Need Help with Insolvency, Recovery or Turnaround?
If you or your business is facing insolvency, the sooner you contact us, the more we can help.
If your business is in distress, or a client’s is, and you’re looking to appoint an insolvency practitioner, why not contact us, or call us on 0208 088 0633? We’ve got offices in Brentwood, Salisbury and The Cotswolds, as well as Central London. This means we cover much of the South and the Midlands of England. The first discussion is FREE.
We’ve been around since 1996 and have handled more than 2,000 insolvency cases across many industry sectors. Look at some of our testimonials to see the results we have achieved and what our clients said.