As corporate insolvencies reach their highest levels in over a decade – many accountants will be working with clients that might be in worsening financial difficulties. 

Even if they aren’t insolvent or trading whilst insolvent themselves, your knowledge and experience might give you the insight to know that they are firmly on the path that, if unaltered, would end in an unplanned or worse, unexpected insolvency. 

As well as being distressing for an unprepared director or business owner, a disorderly insolvency could also cause problems for their accountants too, who will end up working with an insolvency practitioner (IP) who’s job in this scenario would be to protect the interests of the creditors. 

However, many accountants and IPs are building positive working relationships without their clients requiring their services and deepening their mutual understanding of each other’s trades and the specific differences and nuances that the other might not fully appreciate. 


Depending on the circumstances, there are several specific areas accountants can discuss with an IP that will make their own work on any potential insolvency case involving their client or company easier. 

Financial Analysis questions:

  • What is the current financial position of the company? 

The latest verifiable details on assets, liabilities, debts, cash flow and any other recent transactions.

  • Have you identified any potential fraud or other irregularities?

Uncovering the underlying reasons for potential insolvency is crucial

  • What valuation methods have been used for assets?

Understanding the basis used for asset valuation will be useful and will inform potential recovery options.

  • What are the projected recovery amounts for creditors under different insolvency processes?

Each case is different and heavily influenced by circumstances but this basic assessment will allow parties to get a snapshot on the likely potential impact on different stakeholders

Procedural and legal questions:

  • What type of insolvency procedure is being considered?

Having a working knowledge of the various kinds of insolvency options available for a business including CVAs, administration or liquidation is essential for accountants. Fortunately, our accountants hub is the perfect place to learn even more and bookmark for future reference

  • What are the timelines and milestones for the process? 

Knowing the likely time frame for a process and each stage will help you and your client plan and manage expectations accordingly. 

  • What is the role and responsibilities for an accountant in this process?

A key question. As well as clarifying any grey areas, will help all professionals working on a case ensure efficient collaboration and avoids unnecessary or expensive duplication of work.

  • How will creditors be notified and engaged with?

Understanding the communication plan will help transparency on all sides and head off any potential problems or objections by eliminating any misunderstandings

Personal or client specific questions

  • What are the potential implications for directors or business owners?

This conversation should cover all questions of liability including personal guarantees. Risks of directors disqualification should also be discussed if there is any possibility. 

  • What support is available for any affected employees?

It’s important to understand what employee obligations are in place including redundancy procedures. This will also include directors if they receive part of their salary through PAYE.

  • What fees are associated with the insolvency process?

Having a clear understanding of all the cost implications for every party involved is crucial. Most IPs will have a clear and transparent quote system and will be happy to talk through their offering.

  • What information can be shared with the client/company?

A potentially thorny area as balancing transparency with legal constraints is essential. Another concrete reason why a good relationship between the accountant and IP is critical in making any process work smoothly. 


As businesses in every sector begin 2024 with less than optimal economic conditions facing them, their accountant’s knowledge and skill becomes even more valuable no matter what their own situation is. 

The best early-warning system to trouble ahead is the accountancy team as they will be able to spot potential financial issues at their earliest stages before they metamorphose into a critical issue. 

One of the best ways to help avoid these issues is also to get some impartial professional advice on the best ways to make sure a business is fighting fit and ready to face the rest of the year. 

We offer a free initial consultation to any director or business owner who wants one to discuss their needs and ideas and what they can do to implement them and improve their profitability this year. 

The first step is to get in touch.