Small businesses are increasingly turning to suburban accounting and legal firms for advice on insolvency and bankruptcy issues as the economic crisis takes hold.
A survey conducted by Deloitte of Black Inc. Members (network providing specialist accounting and financial service advice) has found that 80 percent of clients of suburban accounting and legal firms are indicating some level of financial difficulty and are seeking help and support on how to manage their business finances.
According to Simon Cathro, Deloitte partner in charge of Black Inc, these firms are becoming overwhelmed with queries and this level of financial difficulty is likely to result in a greater demand for advice on refinancing and restructuring options, small business scenario planning and insolvency.
The survey has shown that 57 percent of respondents had one or more clients making enquiries about insolvency and bankruptcy in the last three months. The main barrier to achieving businesses goals were noted as cash flow and working capital (26.9 percent) and consumer sentiment/drop in sales (22.7 percent.)
Cathro believes that businesses should seek advice sooner rather than later.
“The recent economic downturn and the changes to availability of funds from financers has meant that a number of suburban accountants have found themselves increasingly challenged to be able to deal with clients facing urgent liquidity and trading issues,” he said.
“Often this information is required quickly, before the position of the client becomes too difficult to recover.”
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