A mid-tier has called on accountants to protect their legitimate clients from being impacted by phoenix activity by informing them of telltale signs.
Accountants urged to tackle phoenix activity
Speaking to Accountants Daily, RSM’s national head of restructuring and recovery, Peter Marsden, said that phoenix activity is a very timely and relevant topic for accountants at the moment.
While it can be difficult to stop the perpetrators, Mr Marsden said accountants can still make a difference by educating their clients on how to identify companies that could be potentially being phoenixed.
“It's one of those things that, when you've got directors who are undertaking illegal activity, that's hard to stop,” Mr Marsden said.
“What we should try to do is lessen the impact of those things on our good clients and legitimate clients by talking to them and saying watch out for stuff that happens too readily and if you see people changing structures often, that's a red flag.”
Mr Marsden said clients should be encouraged to exercise scepticism and talk to their accountant if they see any suspicious activity.
“If they have concerns they should stop supply to these people quickly, don't let them run up three or four or five months' worth of debt before you chase your debtors, stay on top of that stuff on an ongoing basis,” he said.
“It’s really just a matter of keeping an eye out, keep your ear to the ground, there's often rumours about this stuff, be aware of what's happening in your surroundings.”