Tax & Accounting News

Accountants Highlight Warning Signs of a Failing Business

19/12/2008

London accountants and insolvency practitioners Harris Lipman have highlighted telltale signs that a business is in potential trouble for professional advisers to look out for.

With the difficult economic climate taking an increasing toll on businesses of all sizes and in all sectors, Harris Lipman says that professionals who spot the early warning signs that a business is struggling can then point them to experts in tackling financial difficulties, such as insolvency practitioners. Among the first signs of trouble to look out for are:

• Late or error-ridden monthly accounting figures
• Late VAT or PAYE payments
• Requests for help in approaching banks for extra funding
• Reduced sales and margins
• Remortgaging of property
• Extended debtors and extended creditors.

Barry Lewis, senior partner at Harris Lipman, said: “Even something as apparently innocent as delays in a client returning phone calls should start to ring warning bells that all is not as it should be with a business.

“Because professional advisers understand their clients’ businesses, they are ideally placed to spot the signs that there could be trouble ahead. By referring them to insolvency specialists, their clients will then have the greatest range of options available to them for getting their business back on track.

“The longer struggling businesses put off facing up their problems, the more likely it is that the enterprise will go under. In the current economic climate, professional advisers need to be even more aware of the financial health of their business clients and be ready to advise them on the best people to talk to when the going gets tough. It is in everybody’s interests to take swift action to help businesses get through these troubled times wherever possible.”
 
For more information, contact Harris Lipman on 020 8446 9000.