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So this is part two of my piece on stakeholders that you’ll interact with if you do a placement in R&R. This time I’ll write about debtors and the government.

In order to ensure the maximum return to your client’s creditors, you will need to recover as much of the outstanding money that they’re due as possible. Debtors are usually customers of the business, but they can be trading partners or companies to which your client has issued loans, depending on the nature of their business.

Recovering your client’s debts is often more complex than you might think. In a lot of cases, debtors will withhold payment, for a variety of reasons. It is then up to you to prove that they have a legal responsibility to pay. This can be done by looking at contracts and your client’s ledger. Once you have established that your client is due the money, you may become involved in instructing debt collection agents or lawyers to help recover the funds. Once the funds come in, you will have to account for them using IPS, the accounting package that is designed for insolvency practitioners.

The government plays a large role in insolvency proceedings. On your placement, you will be responsible for filing documents with companies house on behalf of your client and submitting tax returns. You may need to liaise with HMRC regarding your client’s tax liability too.

The Insolvency Service is the government’s main vehicle for liaising with insolvency practitioners. When you’re six months into a case, they require a report on the conduct of the directors prior to insolvency and their subsequent cooperation. You will also need to work closely with The Insolvency Service’s Redundancy Payments Office as they step in to tide employees over while you recover your client’s assets.

An insolvent business has broadly similar stakeholders to a trading one, but the relationships are different. It is managing these relationships that is key to making insolvency proceedings run smoothly. In most other areas of accountancy, your client is your work provider, ie. the main party that you need to satisfy. In R&R insolvency work, your clients are insolvent businesses, the work providers can be directors, lenders and their legal advisors, and you have a range of statutory responsibilities to perform. This makes it a more attractive line of work for a lot of people. If you think you might be one of these people, then apply now!

Until next time Harry