Monday 24 June 2019

It's vital to get expert advice on best way to deal with Revenue arrears

Problem Solver: Send your small business questions to (Stock picture)
Problem Solver: Send your small business questions to (Stock picture)

Feargal Quinn

Q: I owe a significant amount of back money to Revenue. I am on an agreed monthly payment to clear this, and I have to keep my affairs up to date. I am really struggling and have fallen behind again and feel under real pressure.

A: While you don't state in your email whether you have gotten professional help from your accountant or a specialist financial adviser, I am assuming you have done so. This is really important in a situation like this. It is clear that you have significant problems and need the best experts working with you to give you real advice. With the limited information I have, all I can do is talk in general terms.

There are dozens of businesses that I met that through no fault of their own ran into arrears with Revenue payments, especially during the downturn. By and large, from the cases I have heard about, Revenue seem to be accommodating in the majority of these if there is a sense that the business can trade its way out.

If there are signals that the business is becoming insolvent, it's a different matter and Revenue and other creditors are obliged to protect themselves through laws which are in place for this purpose.

Your 'back-payment' arrangement was a good idea at the time, however if you are not able to keep up with this and service your current debts, something is not right and there might be more fundamental issues with the business.

If you are using the same accountant you have always used, it might be time to have an independent financial review of your business. Your existing accountant, might just be too close to the business and sometimes, in these situations, you need some brutal talking to ensure all the facts are clear and the best options available to you are put on the table.

If it is any consolation, there are loads of people I have met who have been in exactly the same situation and have feared their business was going to close only to work their way out of it over a number of years. Get some professional advice and see what options are open to you.

Q: I am a mid-sized business and have a young manager who is showing great signs of promise, but I don't have roles to promote her into because of the size of the business. I am afraid she is going to get fed up and leave which will be a really bad thing for the future of the company.

A: A real dilemma. You are right to be thinking about strengthening the future of the business and also ensuring that not all of the responsibilities rest on your shoulders. I have seen many successful businesses fail because the owner has tried to do too much themselves. I would compliment you on taking a more forward-thinking approach on developing a team.

First and foremost, sit down with this individual and tell them how you regard their contribution to the business if you have not done so already. This in itself can be part of the retention process. Far too many owners forget to tell their key employees that they value their input. Discuss with this person what their own personal aspirations are and put forward a series of suggestions about their personal development. You could, for example, subsidise, or pay for, their participation in a degree programme or similar if it is of interest to them.

While I take your point that the business may not have room to promote at the moment, or indeed may struggle to pay any additional revenues, sometimes motivated staff relish extra responsibility if it is improving their skill set and they know that in the future a reward will follow.

It's all about developing a career path and you honouring your word over the medium term.

Most staff will see this as fair. There maybe also informal opportunities to further upskill the individual by taking them along to trade shows and conferences with you and exposing them to industry developments when the opportunity arises.

Indo Business

Also in Business