Company: RMG Partners
Position: Principal
IPA status: FIPA
Location: Sydney Ian Purchas compares trying to save a troubled business with taking a nasty lump to a doctor. “It’s much the same,” he says. “Expert advice is needed – urgently. Problems almost certainly won’t just go away by themselves.”
Purchas, 54, is adept at examining ailing businesses and delivering a speedy prognosis. As one of four principals at Sydney-based RMG Partners, he specialises in insolvency and reconstruction across a broad range of industries.
A fellow of the IPA, the affable accountant is also the Institute’s nominee on the Financial Reporting Council (FRC), the peak statutory body responsible for overseeing the effectiveness of the financial reporting framework in Australia.
Most clients consult him as the result of referrals from solicitors or from other accountants. The most common problem: a business, typically an SME, is in difficulty.
“I’ll examine the operation and its activities in detail, perhaps suggesting an insolvency arrangement or some other appropriate course of action,” explains Purchas. “If nothing looks like working, it may well be time to wind up the business.”
Thumbing through his current workload, he reveals he is currently liquidating a funeral parlour, plumbing business, butchery and floral supplier. Some eyebrows may shoot up at the inclusion of a funeral parlour on this list, but Purchas is quick to emphasise that, while “business may indeed be good, the style of management may be its undoing”. He mentions he frequently finds cash flow management to be poor.
It’s undeniable, he asserts, that Australians are holding on to their money. When people encounter unavoidable expenses, they choose the cheapest options. Key worries are general uncertainty over the economy’s direction – as well as, more specifically, concerns about interest rates and superannuation.
An SME’s directors should be quick to sound alarms if they detect or foresee problems, he says, adding that good accountants, in turn, should try to be regarded as integral parts of a client’s business, remaining familiar with its activities. That means they should be ready to wave red flags if necessary. “Accountants should be looking at their clients as business partners and not viewing their roles as simply handling tax-related matters,” he says.
