Fiona Hotston Moore, forensic accountant at Ensors, offers insolvency and business restructuring professionals a crash course in using social media to generate work
|Fiona Hotston Moore|
Too many insolvency practitioners rely solely on networks established through traditional connections and introductions, and ignore social media.
This is unwise. However alien pitching virtually for business may seem, we live in a world where subtle digital selling of ourselves is a standard. Failure to do so is equally eloquent, and not in a flattering way.
Social media is not a fashion, but a permanent piece of the business development landscape that should not be ignored
I was a long way into my career before I took, sceptically, to LinkedIn and Twitter. But I am glad I now do spend the small amount of time required each day to keep my online presence alive. Quite simply, it brings me work.
One assumption people make, presumably after observing teenagers locked in mortal combat with their own social media activities, is that it requires a great deal of time, almost all the time.
However, after mastering the requirements and setting up a profile, it can take as little as ten minutes, three times a week, to keep a useful presence on LinkedIn, by which I mean one that is interesting to potential business leads.
Below I have several tips for LinkedIn and Twitter, which distil all that I have read, and all the presentations I have either attended or given, on the subject. In a nutshell, though: to be effective as a business development tool, social media cannot be delegated in its entirety to the marketing team.
• Be focused. Your profile needs to reflect professional expertise, which means all areas of insolvency and finance. Do not describe yourself as ‘insolvency partner at ABC’ but rather as ‘insolvency practitioner focused on owner-managed businesses in the Midlands’.
• Get a decent head and shoulders photograph taken. Looking like a ‘usual suspect’ is not helpful.
• Ask for recommendations from clients and colleagues, and review the order of your endorsements to highlights key areas of expertise.
• Be committed. Spend two hours setting up a profile, and ten minutes three times a week sharing updates, blogging, inviting new contacts to connect with a personalised message, commenting on connections and updates, and finding new relevant people to link with.
• Be social. Join relevant groups and contribute to discussions. But be wary about setting one up – nothing looks worse than an inactive group.
• Be human. People buy people, so make sure your profile reflects your personality.
• Be patient. It takes time to build a credible online profile.
I also recommend colleagues to focus on LinkedIn before moving to other social media. But when they do, I suggest Twitter.
• Focus again. It is not number of followers, but their relevance, that matters. So, when setting up your profile, following people and tweeting, think about the areas of expertise you want to be known for.
• Be social. This is important. The rule of thumb is that a third of tweets should be ‘social’, a third personally generated material and a third ‘retweets’ of other people.
• Be tweeting little and often. Three to five a day is good, preferably over the lunch and commuting period. There are many silent stalkers on social media, so do not assume absence of direct feedback means no progress.
• Be punchy. There are only 140 characters to a tweet after all.
• Be in all places. Download the Twitter app onto your phone or tablet – it makes tweeting as a daily habit far easier.
A final thought is to consider how social media can boost areas such as recruitment, employee engagement and social responsibility goals. Pinterest, Facebook, YouTube and Google+ all have a role here.
The truth is that, whether welcome or not, big choices are increasingly made online, and that includes deciding who we do business with.
Insolvency practitioners will have a role to play with auto-enrolment responsibilities for insolvent companies. Nicola Edwards, head of compliance and enforcement at The Pensions Regulator, runs through what IPs need to know
Head of compliance and enforcement
‘Insolvent employers must still comply with their automatic enrolment duties’ is the message to insolvency practitioners (IPs) from The Pensions Regulator.
Where an insolvent employer continues to employ staff they continue to have auto-enrolment obligations and insolvency practitioners acting on behalf of their employer clients have a responsibility to ensure the employer’s compliance.
Next summer, tens of thousands of small businesses will see their auto-enrolment duties come into effect. Unlike larger insolvent employers, small employers are likely to use small high street practices with fewer resources. The Pensions Regulator is now alerting them to what they need to know.
Auto-enrolment laws apply to all employers, who must enrol certain staff into a workplace pension scheme and make contributions towards it. Eligible workers are those over 22, who earn more than the current £10,000 threshold and who work or ordinarily work in the UK. Employers must assess all their staff and tell them how the changes apply to them as individuals.
Employers, if they have not already done so, must first find out their staging date. The staging date is a date set in law and is when an employer’s auto-enrolment duties come into effect for that employer. The easiest way to do this is by using the staging date tool on the regulator’s website. In order to comply with auto-enrolment duties, the employer will need to carry out a number of tasks.
Employers should then use the timeline planner which tells them what they need to do and when. They will also be asked to nominate a contact who will be responsible for the day to day implementation of auto-enrolment and who will receive important information from the regulator. Where a business is insolvent and an IP is appointed, the IP should be the primary contact.
Postponement is a tool available to employers who want to postpone the duty to assess their staff, it is often used by employers who have staff they know are in short term employment. In the same way, postponement can be used for insolvent employers who will no longer be employing staff.
Declaration of compliance
The final task for an employer is to complete a declaration of compliance. This is a legal requirement and informs the regulator what the employer has done to meet their duties. In the case of an insolvent employer, there will be no requirement to complete a declaration of compliance where, on the staging date, the employer no longer employs any staff. Where, on the staging date, the employer still employs staff but they subsequently leave employment, the employer will still need to complete the declaration of compliance.
Under auto-enrolment law, employers must keep certain records for six years. In the case, of an insolvent employer, once there are no workers left then the entity ceases to be an employer and so the requirement ceases to apply. Any record keeping requirement under insolvency legislation would however continue to apply.
The role of The Pensions Regulator
Under the Pensions Act 2008, the regulator’s objective is to maximise employer compliance with their auto-enrolment duties. In line with its compliance and enforcement strategy, the regulator takes an ‘educate and enable’ approach, providing employers – and in the case of insolvent employers, their IPs – with the information and guidance to help them comply with the law. The regulator has also recently refreshed its website to be more user friendly for smaller employers.
Around 12 months ahead of their staging date, businesses will receive a letter from the regulator warning them to take action and get a plan in place. If IPs wish to contact the regulator they will need the letter code and PAYE reference from these letters.
Compliance and enforcement
The regulator’s consistent message to employers is to start preparations in good time to avoid non-compliance and IPs should also leave, as far as possible, enough time starting with visiting the regulator’s website for more information. We take an ‘educate and enable’ approach and in line with our compliance and enforcement strategy and will consider matters on a case by case basis. Intentional non compliance will be met with penalties.
We appreciate IPs will have a lot to do once they are appointed to an insolvent employer and they are also urged to take action to rectify any problems sooner rather than later. IPs will find all the information they need on our website and that should be the first port of call. There are a small number of instances, however, when an IP should contact our customer support team. IPs should contact us if an employer ceases to exist (they no longer employ staff) so that we can update our records.
The customer support team will also be able to assist if an IP does not have the information they need to complete a declaration of compliance – such as the letter code (found on letters from the regulator to an employer).
Striking-off ‘zombie’ companies keeps millions from the Exchequer’s coffers, says Brian Johnson, insolvency partner at HW Fisher & Company
With next year’s general election looming large, the possibility of further tax rises before May is unthinkable, though unsurprisingly, alarm bells for potential post-election hikes are already ringing.
Yet a recent report has highlighted massive failures by HMRC in pursuing unpaid taxes from ailing businesses, taxes that could be used to offset the gaping hole in public spending and to ease pressure on a new government to introduce unpopular tax increases.
The report, by prominent tax justice campaigner Richard Murphy, concludes that millions are being lost every year to so-called ‘zombie’ companies. These are businesses that have been consistently under financial pressure through the recession, managing to pay the interest on their loans without ever making enough money to pay back the capital, and which often opt to be struck-off rather than going through formal insolvency. And it’s easy to see why.
The procedure to ‘strike-off’ a company is covered in Part 31 of the Companies Act 2006. The director of a company must submit a ‘Statement of Truth’ to Companies House, confirming that the company:
• is solvent;
• has paid all its creditors;
• hasn’t traded/sold stock in the previous 3 months;
• hasn’t changed names in the previous 3 months;
• is not in liquidation;
• hasn’t entered into any voluntary arrangement with creditors.
The cost to submit the forms is just £10 and, conveniently, winding up a company in this manner means the ailing business does not have to produce accounts or a statement of affairs.
Historically it was HMRC that would act as a check and balance for companies at this stage, objecting to the striking off of companies that may have unaccounted Revenue liabilities. But their diligence has now been called into question.
Revenue and Customs have not been immune to the government’s austerity measures, suffering severe financial cutbacks and job losses in recent years. The large number of companies being struck off the register without oversight would suggest that the previous check and balance mechanism has broken down.
Consequently, the whole system is open to abuse by unscrupulous directors who see it as an opportunity to avoid independent inspection and review of their conduct, and orderly liquidation of any assets their company may still possess.
It’s also a vastly cheaper alternative to the cost of a formal insolvency procedure through liquidation, a process that can cost upwards of £3,000 and might well involve additional recoveries from the director(s) and it’s these hidden assets and potential resulting dividend distributions that are being lost to the Exchequer and other creditors.
Would-be creditors can challenge the strike-off procedure, though understandably this rarely happens, either due to a lack of knowledge of the strike-off or from their reluctance to throw good money after bad in pursuing a company that no longer exists.
It’s believed that as many as half a million companies a year are dissolved, many of which very little is known about, if anything at all.
And herein lies the problem; a self-perpetuating cycle where agencies aren’t given funds to pursue dishonest businesses, thus enabling them to avoid paying the taxes that would not only fund HMRC’s investigations but also plough millions back into governmental coffers.
One suggestion put forward to help HMRC keep track of rogue businesses is the requirement for financial service providers (including accountants and lawyers) to report the identity of all companies they conduct business with – and know to have bank accounts or other indications of trade – to HMRC and Companies House.
But this would amount to little more than passing the buck. The Department for Business, Innovation and Skills (BIS) recently summarised the results from its ‘Red Tape Challenge’, a consultation process looking at ways in which the admin that companies are required to undertake can be reduced, thus helping them to become more efficient and profitable.
One of the consultation’s main recommendations concerned simplifying the self-filing of company details at Companies House. If this accountability is removed from individual companies, it seems somewhat unfair to make it the responsibility of FSPs instead!
If government wants to recoup the millions it’s losing to shadow businesses, it needs to take a long, hard look at the resources made available to its own agencies and, perhaps, see them as a business too, one where the mantra ‘speculate to accumulate’ is applicable.
Devonshire company Axminster Carpets, which can trace its roots back to 1755, entered administration in February last year. The company was brought out of insolvency in April 2013 by a consortium of private investors and in April of this year, reported turnover of £12m. Here, asset valuation firm SIA Group details its involvement in the rescue of the historic company.
SIA Group worked closely with all stakeholders of Axminster Carpets to:
• Conduct the asset valuation of carpet & yarn stock and textiles machinery & equipment;
• Value of the intellectual property, including brand name, designs, trademarks and patents;
• Collect contractual book debts;
• Provide a detailed 120 day stock exit strategy to work out the carpet & yarn stock from factory outlets should the sale of the business and assets not succeed;
• Secure the premises across multiple locations;
• Conduct a global private treaty sale campaign to sell large, high value and technical machinery, followed by a global online auction sale for remaining assets;
• Complete health and safety and environmental risk assessments.
• Key issues were identified in the stock and book debts, namely retention of title, contractual debt, warranties, poor quality stock reporting systems, lack of visibility in standard costing and margins.
• Very well-known heritage brand and largest local employer, attracting significant national media interest.
• The combination of speed and the best valuation and disposal solutions to assist in the sale of the company from administration as fast as possible.
Over £18m achieved from total asset realisations.
SIA Group’s pioneering Accelerated Inventory Realisation (AIR) programme was implemented with the sale of £1.1m of obsolete and slower moving stock, through the company’s two factory stores, and by negotiated sales to independent retailers and wholesalers. A margin of 17.1% was achieved on these sales, which was an exceptional result considering the inventory had been written off by the company.
£1.85m realised from the private treaty sale and online auction of redundant yarn production plant & machinery, which was sold to buyers globally.
“Above and beyond their excellent asset valuation and disposal skills, what absolutely shone through was how many times the SIA team would go the extra mile. This was a complicated situation, but Matt and Paul handled any and all difficulties very professionally. They worked very closely with the management team and built a first class relationship with them.”
Josh Dutfield, managing director, Axminster Carpets Limited
“SIA have a ‘can do’ attitude and would always offer assistance in any way they could. No problem was too big or too small. They were focused on getting the job done well.”
Declan McKelvey, interim CFO, Axminster Carpets Limited
“I worked very closely with Matt through the clearance of the Buckfast yarn plant and his honesty and integrity is head and shoulders above anybody I have ever dealt with in his profession. Matt got the best prices and best solutions he could ever have got. There were no quick fixes or quick wins. Absolutely first class.”
Les Tonkin, yarn divisional director, Axminster Carpets Limited
“This was a sensitive and complicated situation, but SIA managed all of the stakeholders requirements with comparative ease.”
Benjamin Wiles, joint administrator, Duff & Phelps
“What impressed me was their commerciality and drive to get the best result possible. They were on site a great deal and were meticulous in their approach. To say they were flexible and reactive would be an understatement. I recall one situation where a national TV crew arrived at the site. Paul was there immediately and managed to persuade them to leave without any fuss, which was very impressive.”
Kevin Buckett, senior manager, Duff & Phelps
“SIA was already on site and ahead of the curve when we first encountered them on this case. Speed and accuracy were the order of the day to ensure the right outcome and the SIA team met that challenge extremely well.”
Andrew Rutherford, business development director, Shawbrook Business Credit
Our structured approach to understanding and working the assets is always from the ground up.
To discuss how we can partner you in your next restructuring assignment please contact our offices:
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What the graphic shows: The number of administration appointments won by the top performing firms during the month ending 30 September 2014 across England & Wales as listed in The London Gazette.