Many people believe that they only can call Insolvency Practitioners (IPs) when their company has actually become insolvent, but this is not entirely true. Before that, there are several situations where you might need an insolvency practitioner, like those cases where the companies are still solvent but need help to turn their fortunes around and trade profitably again.

If you are struggling to ensure that your company can meet its financial obligations or you are in a position where your bussiness has already been threatened by a legal creditor – or it is about to be, it is likely that you need to consult a licensed professional as soon as posible to identify and present all your options for recovery or restructure, keeping in mind the long-term goals for your business.

What is an Insolvency Practitioner?

Insolvency Practitioners have a broad remit when it comes to giving advice. Whether it is providing simple tips on how to deal with temporary cash flow problems, or drawing up a Statement of Affairs to present to your creditors, their involvement and influence throughout the process is invaluable.

An Insolvency Practitioner (IP) is someone who is licensed and authorised to act in relation to an insolvent individual, partnership or company. Most IPs are accountants or insolvency specialists working in firms of accountants. Before they are allowed to provide their services, they must hold a licence and pass the insolvency examinations (JIEB exams); gain some experience in insolvency work; and satisfy an authorising organisation (also known as regulator) that they are fit and proper to act as an IP. The Insolvency Practitioners obviously must follow the law and their work is monitored by these regulators to make sure that they do.

Why is it good to get in touch with an Insolvency Practitioner at an early stage?

If the unability to satisfy the debts is a one-off event and the company was successful and profitable prior to the current situation, consulting a licensed Insolvency Practitioner at an early stage offers the best chance of survival. Besides helping insolvent companies, the role of an IP also includes the provision of advice to directors when their business are experiencing temporary cash flow problems due to downturns in the market, a key customer who has become insolvent itself or something as innocuous as an unexpected bill.

So, if you are not insolvent at the moment but your bussines is starting to face some challenges concerning to its finanicial situation, it would be a good idea to start thinking abour getting some advice. You can find plenty of Insolvency practitioners London online which also operate from offices around the country.

How can a Insolvency Practitioner actually help your company?

An Insolvency Practitioner will assess the financial situation of your company and help you to decide and pursue the best course of action for your bussiness in order to avoid legal an financial consequences depending on your particular situation. An option might be agreeing on a creditors’ voluntary arrangement with the company’s creditors – which can be powerful tools when helping restore an insolvent company to solvency again.

In addition to helping you deal with your solvency problems, an insolvency practitioner can also offer advice to help improve the financial situation of your company. There is a wide range of issues that an IP could help you with, such as suggestions to deal with company cash flow issues in a better way; what kind of practices can lead your company into insolvency and how to avoid them; or financial counseling about bank-related actions – company loans and personal guarantees, alternative finance options, and so on.

Negotiations with HMRC

HMRC are the UK’s tax, payments and customs authority, a non-ministerial department, supported by 2 agencies and public bodies. They are known among companies to collect monies quickly and aggressively. They have the power to issue a Notice of Enforcement without recourse to the courts, which could signal the end of the road for your company – because goods could be seized from your business to pay tax arrears or other overdue amounts.

As discussions with HMRC can be particularly problematic and stressful if they are not conducted proficiently and with an understanding of HMRC’s point of view, intervention on your behalf might be the best chance to set the company back on the right track.

An Insolvency Practitioner can negotiate with creditors (including HMRC) on your company’s behalf, put forward all the options available to you, and recommend the best course of action in your company’s circumstances. The judgement of a professional advisor always inspires a sense of confidence in the company’s long-term ability to pay its bills, and creditors are more likely to respect and trust the negotiations if they are guided by specialist knowledge.