R3 urges firms to seek help at earliest opportunity

Date: 12th July 2010

UK business owners could be encouraged to seek the advice of a specialist tax accountant following the publication of a new report.

Recently-published figures from insolvency trade body R3 have suggested that business owners who fail to notice they are in a bad financial situation are more likely to fail.

According to the organisation, nearly 40 per cent of failed businesses could have been saved if expert advice had been sought at the earliest opportunity.

The report also revealed that 56 per cent of corporate failures can be attributed to "bad management".

R3's president Steven Law commented: "Regardless of the economic circumstance, no business will survive with poor management in place.

"I have seen a good workforce let down and sometimes laid off due to management which do not admit and correct their mistakes."

Data from the study also showed that 60 per cent of insolvency practitioners believe the UK's regime is "overly forgiving" of directors of failed firms.

"There must be enough checks and balances to ensure that directors of failed companies should not put creditors and jobs at risk if they are allowed to repeat their mistakes," Mr Law added.

Posted by Jacob Williams