The role of a business administrator
A business administrator is a qualified insolvency practitioner who takes control for the financial management of a company when the company is facing financial difficulties. When a business administrator is called in, the business is described as having ‘gone into administration’.
The role of a business administrator is to turn the business around, by getting the business out of its financial difficulties and making a profit again.
If it isn’t possible to turn the business around, then the Business Administrator will sell off any assets and try and pay off the creditors. They will try and get the best possible deal for the creditors. If necessary the Business administrator will fold the company.
A business administrator may be involved in the following tasks:
- Reviewing the situation, identifying problems and determining the causes
- Communicating to creditors, presenting a proposal for repayment
- Implementing ways of improving cashflow, for example using Invoice Finance or debt recovery
- Raising Capital, for example by selling company assets or selling part or the whole business
- Reducing outgoings, for example downsizing the business premises and reducing headcount
- Setting up a Company Voluntary Agreement, so that the business can continue to trade while insolvent
- Winding up the company
- Adopting methods to try and turn around the business
Why are business administrators needed?
Business administrators are qualified insolvency practitioners so they will have a vast amount of experience of dealing with insolvent businesses, therefore they can play a key role in turning your business around.
The quicker business administrators are brought in the better as they will have more time to start working on getting your finances back on track; also if they are called in soon enough there will be plenty of available courses of action to take.
Company directors can choose to call in a business administrator as soon as the business begins to suffer from financial difficulties. If however you don’t call them in yourself and your creditors become worried about being paid a court can appoint an administrator.
The benefits of business administrators
Business administrators can benefit your business in the following ways:
- provide you with the expert advice needed to rescue your business
- apply to a court to suspend the payments to your creditors, therefore buying you more time
- make rational decisions in order to save your business- this may be hard for you to do because you are emotionally attached to your business
- they can turn your business around and restructure processes to make your business more successful in the future.
To understand the whole range of options and to get help choosing the right one for your business contact us on 0800 597 4757 or enquire online using the form opposite.
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