Do I need an accountant or an Insolvency Practitioner?
If you need cash flow or tax advice, speak to your accountant. If your company can't pay its debts and is under serious creditor pressure, speak to an Insolvency Practitioner. Many businesses need both, an accountant to manage the numbers and an Insolvency Practitioner to advise on how to rescue the business if it runs into financial difficulty.
Only a licensed Insolvency Practitioner is authorised to give insolvency advice and oversee formal insolvency procedures, such as a Company Voluntary Arrangement, administration, or liquidation.
Since qualifying as a licensed Insolvency Practitioner in 2005, I've worked with hundreds of accountants to support their clients with cash flow problems, HMRC debts, and creditor pressure. More directors are facing this question, as according to the latest Red Flag Alert, 53,756 UK businesses were in ‘critical’ financial distress in Q2 2026, up 9.0% year-on-year.
What’s the difference between an accountant and an Insolvency Practitioner?
An accountant helps you understand and manage your finances. An Insolvency Practitioner advises on what happens when a company can't pay its creditors, and usually steps in when (or if) business health starts to deteriorate.
Many of us come from an accountancy background, but insolvency is separately regulated. An Insolvency Practitioner must pass the Joint Insolvency Examination Board (JIEB) exams and hold a licence to accept appointments.
At a glance, the two roles compare like this:
| Accountant | Insolvency Practitioner |
| Prepares accounts and tax returns | Assesses whether the company is insolvent |
| Forecasts cash flow and shortfalls | Advises directors on their duties and personal risk |
| Reviews costs and margins | Advises on rescue and restructuring options |
| Keeps the business compliant and helps the director fulfil HMRC reporting duties | Acts as administrator, liquidator, or CVA supervisor |
| Acts for the company | Acts in the best interests of creditors |
When should you speak to your accountant?
Speak to your accountant as soon as cash gets tighter. Problems spotted early are often ones an accountant can fix. They can help with cash flow forecasting and review what you owe and to whom, so you can prioritise payments. I'll ask for this information when you first enquire.
The accountants I work with are often asked if they can save a struggling business. Usually yes, if the problem is short-term, such as a late-paying customer or an unexpected tax bill. Once the business can't afford its bills, it needs insolvency advice.
When should you contact an Insolvency Practitioner?
Contact an Insolvency Practitioner as soon as you're worried about paying staff, HMRC, or suppliers. In my experience, directors who wait for a winding up petition have far fewer options than those who reach out earlier.
Signs it's time to speak to an Insolvency Practitioner include:
- the company regularly can't pay bills when they fall due
- money owed to creditors is being used to fund wages or essential bills
- a Time to Pay arrangement has been rejected, or an existing one is no longer sustainable
- creditors are threatening legal action, such as a winding up petition, or refusing further credit
- the company owes more than it's owed or the value of its assets
Directors who keep trading when they know, or should know, that the company cannot avoid insolvent liquidation can be held personally liable under section 214 of the Insolvency Act 1986.
Can an Insolvency Practitioner help save a business? Yes, if you seek advice early. The sooner I'm involved, the more options there are, including restructuring and rescue. Leave it too late, and liquidation may be the only route left.
What if your business cannot pay its debts?
Who to contact depends on who you owe and how far things have gone:
If you can't pay HMRC - HMRC may agree a Time to Pay arrangement, typically up to 12 months. If it refuses, or the repayments aren't affordable, speak to an Insolvency Practitioner.
If you can't pay suppliers - Your accountant can help bridge a short-term gap. If the problem is long-term or pressure is rising, you need insolvency advice.
If creditors are threatening formal action - Contact an Insolvency Practitioner immediately. Creditors owed more than £750 can apply to wind up your company, and once a petition is issued, the window to act is small.
If your company is likely to be insolvent, treat all creditors equally. Paying some ahead of others is where many directors are caught out, and it's a key area we examine when investigating director conduct.
Can an accountant and an Insolvency Practitioner work together?
Yes, and the best outcomes often come when they do. Bringing in an Insolvency Practitioner doesn't mean replacing your accountant. Involve both as soon as financial pressure goes beyond a short-term cash flow problem. I advise on rescuing the business, while your accountant supports it day to day.
Your accountant knows your financials, so they're well placed to spot warning signs and recommend a licensed Insolvency Practitioner at the right time.
What can an Insolvency Practitioner do that an accountant cannot?
Only a licensed Insolvency Practitioner, authorised by a recognised body such as the Insolvency Practitioners Association (IPA), the Institute of Chartered Accountants in England and Wales (ICAEW) or the Institute of Chartered Accountants in Scotland (ICAS), can:
- act as nominee and supervisor of a Company Voluntary Arrangement (CVA)
- act as administrator
- act as liquidator
An accountant cannot put a company into liquidation unless they're a licensed Insolvency Practitioner, and even then, acting for an existing client may create a conflict of interest.
How do you choose the right professional for your business?
Speak to your accountant about short-term financial pressure, and a licensed Insolvency Practitioner if problems are persistent. In my experience, the companies with the most options are the ones whose directors seek advice before a crisis.
If you need specialist insolvency advice, you can find me on the Insolvency Practitioners directory, which lists licensed, reputable, and experienced Insolvency Practitioners across England and Wales, part of BTG Begbies Traynor. Each profile shows the practitioner's experience, qualifications, and specialisms.
This article was written for Handpicked Accounts by Dave Broadbent - InsolvencyPractitioners.co.uk
