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Independent Business Review's (IBR)

Independent Business Review’s (IBR)

Independent business review’s (IBR) have been around for decades. They are often used by financial institutions as a vehicle to assess the risk of their investment.

IBR’s have been around for decades. They are often in use by financial institutions as a vehicle to assess the risk of their investment.

Consequently, a number of things can trigger the requirement for an IBR. In the SME sector, it’s often the case a company will be required to provide monthly management information to its secured lender. A secured lender is someone like a bank or factoring/invoice discounting provider. As a result, they provide these to satisfy the lender that the investment risk is minimal.

There are times when the management information provided (negative cash flow forecasts or negative balance sheet) causes concern. If a secured lender does become alarmed about the level of risk to its investment, it is often the case they will contact a Licensed Insolvency Practitioner . The practitioner could be someone such as ourselves at Wilson Field, in order to prepare an IBR.

So the purpose of an IBR is to review a business in its current state identifying any areas of risk to the business. They are also to establish methods of reducing (and ultimately avoiding) risk in the short term.

When conducting an IBR Wilson Field will:

  • conduct an in-depth analysis of historic performance, current cash flows, assets and liabilities;
  • make an assessment of forecast performance, including business model drivers, cash flow; dynamics, working capital requirements and key business sensitivities;
  • review the business’s financial systems and controls;
  • analyse the tax position of the business (VAT, CIS, PAYE and NIC etc).

As business turnaround professionals, Wilson Field’s Insolvency Practitioners’ have great knowledge and experience identifying the weak points of any business. We provide feasible solutions/methods to make these areas stronger, in turn hopefully helping avoid an insolvent situation.

It is often the case that after an IBR has been delivered, the business will implement the recommended changes and the business will trade more efficiently and profitably in the future.

As with many Insolvency matters, highlighting risk early often allows more options to be available to turn around a distressing situations. So if you’re uncertain why your company is not performing as it should, contact Wilson Field and discuss the possibility of having your own IBR?

By Matthew Cluer

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