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Could my Company Benefit from an Independent Business Review?

benefit from a business review
Posted in: Useful Information 3 Mar 21

Independent Business Reviews (IBRs) are often requested by a lending bank when a company looks to be in some form of financial difficulty.  They can be viewed by directors as a painful, expensive exercise enforced by the Bank and which can lead to further financial problems.  

However, there can be a benefit in directors instructing their own IBR, especially where there are significant cash flow or creditor issues, or where the directors are uncertain about the future prospects for the business.  Such a review would be carried out by an insolvency practitioner, accountant or consultant and can be very cost effective.

The types of situation where an IBR could be helpful include:

  • The company is experiencing long term cash flow issues
  • An inability to keep up with repayments to creditors and suppliers
  • There is a threat of legal action from creditors
  • The directors believe the company may be insolvent

An IBR is an assessment of a company’s current and projected financial situation and its purpose is to help directors better understand the issues, and what options they have for dealing with them.  The review is delivered to directors via a detailed written report and can be followed up with ongoing advice and support until the situation is resolved.

What happens in an IBR?

In order to successfully complete an IBR we would need as much financial and trading information as possible.  This should include the last annual accounts, recent trading accounts, bank statements, lists of creditors, details of current financing (including asset financing and equipment leasing) and a breakdown of monthly costs.

This information would be assessed by us and discussed with directors where further clarity is required.  All relevant scenarios and options will then be considered, often supported by financial projections.  Options and recommendations typically include:

  • Funding or refinancing options
  • Proposed actions for improving profitability and cash flow
  • Options for dealing with creditors
  • Formal restructuring options

The outcome of the IBR should be that directors can make informed decisions about the best way forward, with recommendations and a detailed set of actions they can follow.  We can remain on hand to assist with the implementation of these, especially where a formal restructuring or insolvency procedure is required.

In Summary

An Independent Business Review can be cost effective way for directors to understand better the issues they face and to have a clear roadmap for resolving them.  It can help provide a sound basis for negotiation and for rebuilding trust between a business and its stakeholders and enable the directors to move forward with confidence.

If you would like to learn more about this service please call us on 0800 987 1040 or request a callback.

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Robin Tarling

Advice you can trust.