Early Advice From the Professionals Can Often Avoid the Road to Insolvency
Times of change create opportunities. This is the upbeat message from Ken Pattullo, senior partner with business rescue, recovery and restructuring specialist Begbies Traynor.
He believes that while the current economic climate will challenge the survival of some companies, for others it offers the chance to gain a competitive advantage.
“The problem we frequently encounter is that there are still too many businesses refusing to deal effectively with their financial difficulties, thereby allowing them to become potentially increasingly critical by the day, and consequently insolvency can become the only viable alternative,” he says.
One of the major challenges which Ken Pattullo and George Dale, director with Begbies Traynor, regularly face is to persuade chief executives and finance directors to heed the warning amber light and seek advice at an early stage.
“Catastrophe can then perhaps be avoided but once a winding up petition has been served then the chances are decidedly remote,” warns George Dale. “Wherever possible we help companies find the best solution which allows for positive steps towards financial recovery.”
Four all important strategies for survival from Begbies Traynor are:
Manage cashflow very carefully.
Ensure you have reliable and up to date management information available on which to base decisions.
Ensure a robust credit control policy is applied and reduce exposure to poor payers.
Plan effectively for different scenarios and don’t panic…...but if you do panic, panic early!
Ken Pattullo explains that a deterrent to seeking advice can be the perceived cost, but initial consultations or meetings with the Begbies Traynor team to assess the situation and discuss possible ways forward need not result in a fee for that preliminary consultation.
“We are experienced professionals who can identify and recognise the problems and add real value in terms of helping directors deal with the issues,” he adds.
Tips for survival include:
Critically review all the costs in the business and be realistic about asset valuations in the balance sheet.
Keep the bank regularly and clearly informed, don’t suppress or disguise bad news.
Plan carefully for the future and engage with all stakeholders.
Above all else seek advice, and assistance, from the professionals who have seen difficult economic/trading conditions in the past.
Ken joined the Glasgow office of Begbies Traynor in 2003, before overseeing the firm's expansion into further offices in Edinburgh, Dundee, Aberdeen and Belfast. He previously worked at KPMG, Ernst & Young and PricewaterhouseCoopers in Scotland. He has a broad range of experience in Corporate Rescue and Recovery, as well as in turnaround and restructuring, corporate and personal insolvency, investigations and IBRs.
Specialisms: Licensed trade, haulage, property investment/development, construction, agriculture engineering/manufacturing.