The North East Chair of R3, the insolvency and restructuring trade body, has recently said that the region’s charities should demand more access to financial details to help minimise the risk of being left ‘with an unexpected hole in their finances’.
Andrew Haslam points to the theory that many not-for-profit organisations do not have the necessary expertise to spot when something out of the ordinary is happening. This can then leave it open to individuals taking advantage.
In response, R3 has just created a seven-point checklist that they hope will help charities to prepare for, manage and finally overcome financial problems. We summarise these below:
- Analyse the situation. Try to locate robust management information, including financial and non-financial indicators, as well as preparing accurate estimates.
- If possible, cut down the services that you ‘need’ to offer. Whilst doing this, think about which are critical to your mission and which are not. Are there any redundant projects, for example?
- Weigh up the most efficient ways of delivering these services. This may even be done by using the current delivery channels but by simply making cost savings.
- Evaluate finances closely. Cashflow is extremely important.
- Ensure that your assets are working hard for you and sell off any redundant or unnecessary ones.
- Should the organisation no longer be viable in its current form, facilitate a continuation of service through another provider.
- Seek professional advice if necessary, and perhaps most importantly, at an early stage.
Walsh Taylor’s licensed insolvency practitioners certainly second the final point of not letting issues escalate. The sooner we are called in, the more options we are afforded to help to secure a positive result.
If you are therefore based in the North East, Yorkshire or the rest of the UK and need our assistance, please call 03300 244 660.