Should businesses consult solicitors, accountants, or insolvency practitioners?
If your company faces financial issues, ignoring them won’t make them vanish. Problems tend to worsen when neglected. Prioritise seeking professional advice promptly is a crucial step for any company director.
However it’s clear – you know you need advice; who to turn to for this, is not always so straightforward
Advice on financial troubles varies; some suggest consulting your accountant first, while others recommend reaching out to an insolvency practitioner or solicitor.
The roles of an accountant, insolvency practitioner, and solicitor have distinct responsibilities, yet there’s occasional overlap in qualifications and backgrounds. For instance, some insolvency practitioners begin as accountants. Despite similarities, each professional brings a unique set of offerings to your business.
Throughout your company’s existence, you might require the services of all three professionals at different stages. Understanding the key distinctions between accountants, insolvency practitioners, and solicitors is essential to know when to seek their assistance.
1. Solicitor: A legal professional offering advice on various issues such as property conveyancing, divorce proceedings, and injury claims. For business matters, consulting a commercial specialist is recommended.
2. Accountant: Businesses often enlist accountants for company account preparation and ensuring compliance with HMRC obligations.
Yet, accountants frequently bring added value to a company by aiding in business planning, supporting capital raising, and offering guidance on optimal company structures.
3. Insolvency Practitioner: Primarily focused on rescuing struggling companies, insolvency practitioners handle both solvent and insolvent liquidations. Their goal is to maximise returns for creditors and ensure the best possible closure for the company.
Facing Financial Struggles in Your Company? Seek Guidance from Whom?
Accountant vs insolvency practitioner
The course of action depends on the gravity of your issues. If you worry about your business entering a downturn and its future, do discuss this with your accountant.
Your accountant, being acquainted with your company, should already be aware of any financial concerns. In fact, it might have been your accountant who initially highlighted these issues.
They can closely examine your income and expenses, advising on the best course of action. This might involve adjusting cash flow management, assisting in securing suitable commercial finance or proposing cost-cutting measures to enhance your bottom line.
Frequently, accountants may direct clients to an insolvency practitioner if they believe specialised advice is necessary.
If your company’s financial problems stem from your accountant’s actions or lack thereof, you may consider seeking impartial advice directly from an insolvency practitioner.
If you sense your company is in significant financial distress, facing mounting debts and escalating creditor pressure, it is advisable to approach an insolvency practitioner directly.
When could a solicitor help?
If your company’s problems arise from a dispute, be it with directors, shareholders, clients, customers, or suppliers, seeking legal advice is recommended. In such cases, a solicitor is often the most appropriate professional to consult.
Legal advice may be necessary if your company faces issues such as employee claims, professional negligence, health and safety claims, or fines or prosecutions from professional bodies.
Read More:
- My company is struggling financially: what are my options
- What happens to an overdrawn director’s loan if I move abroad
- What is a Statement of Affairs in corporate insolvency proceedings
- Insolvency advice: a guide for limited company directors
- A guide to managing business debt
How can Vanguard Insolvency help?
At Vanguard Insolvency, we specialise in assisting company directors, sole traders, and individuals in resolving various financial concerns. We listen, understand the reasons behind your issues, and collaborate with you to find suitable solutions.
As licensed insolvency practitioners, we guide you through financial challenges. If we believe consulting an accountant or solicitor is more beneficial, we’ll advise you accordingly. Call us now for a free, no-obligation consultation at our offices or a location convenient for you.
I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.