6 Key Tips On Handling Independent Business Review Or Ibr-pp点点通2006

If your busineses is in dificulty you may find your bankers suggesting the use of an Independent Business Review, IBR in the jargon. This article covers what to expect from these independent financial reviews of your business and how best to deal with them. What is an Independent Business Review? Independent Business Reviews or IBRs have been around for many years although when I started out twenty odd years ago we called them investigating accountant’s reports. The theory behind them is that where a business is in difficulty it may benefit from an experienced third party reviewing its affairs with a view to providing an independent and objective assessment of the position and the business’s options. Who .missions an Independent Business Review? In reality, IBRs are almost always undertaken at the insistence of a business’s bankers for one or more reasons which are discussed below. HM Revenue & Customs has now also introduced the concept of IBRs (sometimes referred to in this context as an Independent Financial Review) in all cases where a time to pay request is made for VAT or PAYE/NI arrears of over a million pounds. They also have the power to request this in relation to smaller sums and insolvency practitioners are anticipating that they will begin to do so in cases where they have concerns. Who Pays for the Independent Business Review? You do, normally out of your overdraft facility (have you given a Personal Guarantee for that by the way?). And they can be pricey, HMR&C for example has been quoted as saying that an IBR may cost an average of £42,500 and up to £75,000. Despite the fact that you foot the bill, remember that the reviewer will normally be acting to advise the funder, to whom they will owe their duty of care, not you. While they will normally ask you to review the report for accuracy before it is submitted, there may well be parts of the report such as the security estimates, re.mendations and conclusions which will not be shown to you and the reviewer will normally discuss their findings with the funder in your absence. Who Carries Out an IBR and what do they look at? While staff from a number of disciplines may be involved, IBRs are usually carried out under the auspices of the insolvency (aka Business Recovery or some such euphemism) practices of an accountancy firm and almost without exception the partner and key team members involved will be insolvency specialists. The banks, and now HMR&C, have adopted a panel approach where they use a limited number of firms to carry out this work, partly for quality control reasons and partly to help the banks try and manage costs. Insolvency Practitioners (IPs) often .plain that despite the fees involved, there is little profit in conducting IBRs. They are regarded by some as ‘loss leaders’, work that is done as part of having an overall relationship with a funder as a quid pro quo, or at least a route in, for picking up insolvency process work such as Administrations. Aware of this potential agenda, or at least the perception of it, RBS has a rule that the firm conducting an IBR cannot then take an insolvency appointment in the same case. Fans of this approach say it removes an obvious potential conflict of interest for the IBR firm. Opponents say it is unnecessary as any firm which got a reputation for using IBRs simply as a way to generate more appointments would soon lose the trust of the bankers and the business which flows from it. There is also a view that this approach leads to increased costs in cases which do end in an insolvency as the second firm involved has to spend time getting up to speed. The core of investigating accountants’ reports used to be financial, looking at both historic performance to see why the business was in this situation, where it, and crucially its funder from a security position, currently stood and how these were reflected in the business’s forecasts. While these are still important, Independent Business Reviews, as the name suggests, nowadays usually take a wider view of the business’s health and prospects and are expected to .ment on its management and strategy as well as its numbers. Why is an IBR Used? Whilst at worst an IBR could be sought to provide independent support or justification for a decision which in reality has already been made, or even as a tool through which to conduct what amounts to pre insolvency planning, in practice there are three main reasons why a funder will .mission an IBR: 1 Information – traditionally many were undertaken simply to help the funder find out what was going on in the business, particularly in the absence of up to date financial information. With .puterised accounting systems it is generally easier for banks to obtain some historical information so the purely financial aspects of simply establishing where the business stands tend to be less important these days in most cases. Even so, some reports still tend to be produced which are highly financial in orientation and better used as doorstops than as management documents. 2 Standard Procedure – where IBRs have been part of the traditional approach to deciding how to deal with a problem they can be.e ingrained in a funder’s culture as part of their normal process. This can lead to a tendency to ask for one as a matter of course or to simply have it on file although to be fair most experienced business support managers are more selective in their use of this tool these days. 3 Provide Real Help – a good IBR can be invaluable assistance to both the funder and the business where they actually identify the business’s options and give appropriate re.mendations (which can occasionally involve the funder providing more cash where justified) that help to move it along a critical path towards recovery. While often being quite blunt about the current issues and reasons for them, the best of this type of report can be the core of a business’s turnaround plan. How Should You Deal With an IBR? If you are faced with an IBR here are six basic points that you may want to consider: 1 Understand what is going on. Do you understand both the funder’s and the reviewer’s agenda? 2 Understand how much it is going to cost and how this is to be paid for. 3 Cooperate in the process. The team will want to see a lot of information and ensuring this, particularly financial information, is provided quickly and efficiently can help in ensuring a positive out.e. 4 Be aware of funder’s security position. As you are unlikely to see the one in the IBR prepare your own estimates so you have a view for the so called value break and the strength of your negotiating position. 5 You are paying for it so make sure the review helps you and your business derives value from it. 6 Fight your corner and use the IBR as a channel to .municate your plan to the funder. Remember the reviewers are not there to advise you, but the funder so if necessary get in someone who speaks the bank/IP’s language to help you through both the IBR and any subsequent discussions. Of course the information contained in an article like this can never be a full statement of the legal position as the relevant laws are .plex and liable to change. This article can only therefore be a general guide as to the issues involved and as these can have serious implications you should always seek appropriate professional advice on your own particular circumstances before taking any action. 相关的主题文章: