Accountancy Europe has posted a fact sheet “SME risk management: insolvency” for accountants on its website.
«We highlight the role that professional accountants can play in managing and preparing for the risks, identifying red flags to better advise their SME clients», — noted by the authors.
This paper – part of SME risk management project series – outlines some of the main insolvency risks and challenges faced by SMEs.
It also includes two checklists to support the accountant in their work to mitigate their clients’ insolvency risks.
What can accountants do to help with SMEs’ insolvency risks?
“The profession is strongest in assisting to prevent and mitigate insolvency risks before they materialise. On legal competence, the accountancy profession’s formal involvement as insolvency practitioners in Europe is relatively limited. There are exceptions for specific countries such as Italy and the UK, where it plays a more prominent role.
Most SMEs in Europe have a professional accountant for services such as bookkeeping, financial management, filling tax returns and providing business advice. These day-to-day services already help SMEs avoid financial distress and prevent insolvency problems <…>”.