Accountants may want to offer advice to struggling SMEs

Accountants north of the border may want to keep a close eye on the financial affairs of their clients after accountancy firm PKF predicted that an increasing number of Scots will go bankrupt this year.

The firm, which specialises in advising entrepreneurs, suggested that even more affluent businessmen could be unable to cope with the economic downturn in 2012.

In the third quarter of 2011, 5,378 Scots were declared bankrupt, an increase of 210 on the comparable period in 2010.

Bryan Jackson, a corporate recovery partner at PKF, said most people expected the economy would start to recover last year and that the number of personal insolvencies, although high, would at least stabilise. However, the fluctuating economy and the Eurozone crisis have meant an increasing number of people now face financial difficulties.

The firm now predicts that around 1,300 Scottish firms will go bust in 2012 as businesses battle against the failing economy.

Although big businesses continue to win the battle, small firms are not so lucky and contractor accountants may want to step in and help their smaller clients balance their books and draw up new financial strategies.

R3, the insolvency trade body, has admitted that a lot of people are struggling to keep up with their payments. John Hall, a Scottish R3 council member, said a lot of Scots are now finding they are unable to survive in the current economic climate.

These people are classed as zombie debtors because they only pay off the interest owing on their debts and if their circumstances take even a slight turn for the worse they will find themselves insolvent.

Any company that finds itself struggling to cope with its debts, especially if they owe money to HMRC, would be well advised to contact their accountant as soon as possible.

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