A Guide to Investigating Accountants

Published on : 4th August, 2017

Categories:

For Accountants

Investigating or Reporting Accountants
Background
What will this cost?
But we cannot afford that?
Will we see the report?
Will we have any input into the report?
Who can we get to help?
Our adage is go to the bank with the solution not the problem!

Investigating or Reporting Accountants

Is your company facing an investigation by “reporting or investigating accountants”?

What are investigating accountants (or reporting accountants)?

Background

When a business has financial or operating difficulties it can often breach its borrowing facilities from the bank or from factoring companies. This can lead to missed payments, problems with the payments of direct debits, missed loan repayments and generally builds pressure on the cashflow.

Banks have quite sophisticated systems for monitoring this risk, but often they are “in the dark” with regard to the up to date financial performance of the company that owes it the money. One way of addressing this is to demand (as their borrowing conditions usually allow) detailed and up to date information from your company.

If such information is difficult or impossible to produce because of failings in the financial reporting systems within the business then they will worry that old and out of date information is being used to run the company and their lending could be at more risk.

You may have noticed by now that bank’s do not like risk! So the next remedy is to insist upon the introduction of investigating accountants. This will normally be paid for by the company, thus the act of appointing investigating accountants could lead to further breach of the facilities!

Investigating accountants (IA) usually have a brief to investigate the following:

Cashflow, current daily and for say the next 12 months month by month
The current profit and loss activity, previous results and forecasts for say the next 12 months month by month
Performance against your past forecasts (in other words can your forecasting be relied upon).
They will investigate the current creditors and forecast that for say the next 12 months, month by month.
They will look for red letters from creditors leading to CCJs Warrants, Statutory Demands and winding up threats.
They will check to see if the company is up to date with the Crown creditors (PAYE and VAT) or if in arrears.
They will check the quality of debtors and current assets like stock and Work in Progress (WIP) in the business.
The strength of financial reporting will be assessed, as will the people involved.
They will look at the business and marketing plans and check whether they are fit and feasible for the business.

Taking all of the above into consideration they will then write a report for the lender to state the options the lender should consider and what their recommendations are. The options they can outline for the bank are as covered in depth in this website: receivership, administration, liquidation, advancing more money to help a short term requirement (yes that does happen!), withdrawing banking facilities, asking the shareholders to put more money in etc.

What will this cost?

Well the answer is how long will it take and who is doing it. Usually it is an insolvency practitioner and some of his/her managers/admin staff as a team. We have seen IA’s charge anything from £7-10,000 to £50,000 depending upon the complexities and size of the company or group. BUT the bank almost always insists that the company pays for this. Even if you refuse to pay and refuse to issue a cheque, the bank has the ability to “dock” the money from the company’s account!

But we cannot afford that?

Yes that’s part of the problem. You can always refuse to pay and state that the board/finance managers will do much of the information provision, but generally there is a significant cost and it is seldom that the bank gets the work done for nothing or agrees to pay for it.

Will we see the report?

Often no, however if you have a cooperative approach then the bank will share some or all of the report with you. Often the report remains confidential. So you may pay for it but you often cannot get access to it.

Will we have any input into the report?

It’s much better to take part and put your views across forcibly with good information to back it up. So if you have not got that level of information (particularly as described above allied to information on orders, sales, enquiries, marketing, restructuring plans, downsizing and cost cutting) then you must get it to get your views across.

Who can we get to help?

You can often get assistance from your accountants/auditors. But if they’re not up to speed with the problems then that can be counter productive as they will generally look on negative information as a weakness that the bank may exploit. We can help your business prepare restructuring plans; we have worked with dozens of companies and advised them how to plan their actions when the bank starts putting pressure on the facilities and asking for investigating accountants. Then we will normally help present those plans to the bank, this may avoid investigating accountants or indeed reduce their negative reports to the bank.

Our adage is go to the bank with the solution not the problem!

So if your company looks at risk from its bank and or investigating accountants, then call us NOW on 08009700539 and ask for one of Keith Steven, Eric Walls, Wayne Harrison or Iain Campbell. .

Spaghetti House Enters Administration With All Restaurants Closed

14th May, 2026 in A guide for redundant employees in administration or insolvency situations Notice of Intention to Appoint Administrators

Spaghetti House, one of London’s longest-running family-owned Italian restaurant chains, has entered administration, bringing 70 years of trading to an end.Lavval Restaurants Limited, which traded as Spaghetti House, was placed into administration on 6 May 2026. Asher Miller and Stephen Katz of BTG Begbies Traynor were appointed as joint administrators. The administration notice lists the business as licensed restaurants trading under the Spaghetti House name.All remaining restaurants have now closed with immediate effect. The closures include sites at Marble Arch, Carnaby Street, Oxford Street, Kensington High Street and Cranbourn Street. The original Goodge Street restaurant, where the business began in 1955, had already closed last year.A statement on the Spaghetti House website said: “We’re sorry all our restaurants are now closed.We would like to express our deepest gratitude to our loyal customers, partners and team members, past and present, for your support over the years.From our family to yours, Grazie.” The business was founded by Simone Lavarini and Lorenzo Fraquelli in 1955, with the first restaurant opening on Goodge Street in Fitzrovia. Over the decades, Spaghetti House became a familiar part of London’s casual dining scene, operating multiple restaurants across the capital.Luigi Lavarini, executive chairman and chief executive of Lavval Restaurants Limited, said the decision had been taken “with a heavy heart” after years of difficult trading conditions. He cited rising costs linked to the pandemic, Brexit, government budgets and wider global instability as factors affecting the hospitality sector.BTG Begbies Traynor said the company had been affected by challenging market conditions, including rising operational, employment, energy and tax costs. The administrators will now oversee the wind down of the company, realise assets, assist former employees with claims and report to creditors in line with their statutory duties.The closure is another example of the pressure facing hospitality businesses, particularly those operating from city-centre sites with high rents, wage costs, energy bills and reduced consumer spending. Even well-established brands with long trading histories can become vulnerable where customer numbers fail to recover sufficiently and fixed costs continue to rise.For Spaghetti House, the administration has resulted in the immediate closure of all restaurants, ending a business that had been part of London’s restaurant landscape for seven decades.

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