Independent Business Reviews

What is an Independent Business Review?

Independent Business Reviews have been around for some time and were often referred to as investigating accountant’s reports in the past. The purpose of an Independent Business Review is to gain an external, objective view of a business’ situation.

In light of the ongoing economic challenges in the UK, Independent Business Reviews are starting to play an important role, particularly with lenders, investors and venture capitalists who often commission them before committing to a lending proposition or an investment. They are also gaining popularity with HM Revenue & Customs (HMRC), who are using a similar style of review, often called Independent Financial Review by the revenue, as a means of facilitating the resolution of large outstanding payments of the likes of VAT, PAYE or National Insurance.

Irrespective of whether you are hoping to secure funding, or you are faced with a potential lender or investor who wants a more detailed, impartial view of your business, an Independent Business Review could be the answer. Providing the clarity for internal teams, lenders and investors to move forward with confidence, an Independent Business Review often facilitates the way ahead.

How does it work?

An Independent Business Review involves the reviewing accountant and the management team working together to establish the precise and current state of business play, as well as reaching a conclusion on the ability of the directors to move the business ahead as proposed. When making these judgments, the reviewing accountant will be looking at:

  • The current trading and financial position of the business
  • The profit and cashflow projections
  • The business and financial strategies
  • The management and systems
  • The availability of bank security
  • The short, medium and long term potential of the business

Independent Business Reviews are not a form of negative check on a business. A well-constructed and well-executed Independent Business Review brings value to the internal management team, as well as providing an objective and comprehensive assessment for the party requesting the review.

Who does the review and how much does it cost?

If a bank or an investor is insisting on an Independent Business Review, they will typically be the ones to appoint the reviewer, perhaps from a preferred list. That said, where a lender or investor has commissioned the report, they will not normally pay the cost, so it’s important from a business owner’s point of view to establish what the likely costs are going to be.

The next step

If you’re considering an Independent Business Review, or you’ve been asked to get involved in an Independent Business Review, contact us to find out more.