It is your responsibility as an accountant to give your clients the greatest financial assistance for their unique circumstances. The fun aspects are starting a business, growing or combining businesses, and assisting your clients in growing or saving money. Unfortunately, every career has drawbacks; for accountants, one of those drawbacks may be when your clients are struggling.
However, your duty as an accountant is to advise these companies on the most effective ways to make and manage their money. What transpires next if your customer has trouble making ends meet or finding a way out?
The following information will help you understand how to suggest bankruptcy as an accountant and how a bankruptcy attorney wilmington nc is someone you should definitely contact.
An accountant may suggest bankruptcy.
Clearly, the answer is yes. The best advice you can give is to advise your client to file for bankruptcy if you believe this is their best course of action.
When is Business Bankruptcy the Best Option?
As a CPA, you make and keep your clients’ money safe. Additionally, you might not have much experience advising a client about bankruptcy if most of your clients were fairly prosperous before the worldwide pandemic. Unfortunately, businesses in a wide range of industries are struggling in the wake of the epidemic. For many, bankruptcy may be the wisest option and the only one that can save the company and safeguard the owner’s personal assets.
Here are a few indicators that one of your clients might benefit from filing for bankruptcy:
- No Refinancing Is Possible
If a company is having trouble making loan payments and no lenders will provide them with refinancing, they are out of options. Short-term or problematic debt refinancing is a frequent choice that should be available to most firms. When lenders are unwilling to assume the risk, a problem develops.
- They are unable to make impending SBA payments.
Due to COVID-19, the SBA granted hundreds of millions in loans. Many firms understand they will struggle or cannot make the SBA payments as they become due. Bankruptcy may be the greatest option to reduce the balance or payment if your client is aware that they are unable to make their SBA installments.
- They Owe Payroll Taxes in Two+ Quarters.
Most firms find it extremely challenging to recoup after two-quarters of unpaid payroll taxes. In fact, if your client fails to remit either sales or income tax in Texas, you—the accountant—could be held personally accountable. As soon as you learn that the customer cannot pay their payroll taxes, it is better to address the issue’s root and start thinking about solutions.
