Restructuring and insolvency services help organisations which are in financial difficulty. These organisations are typically on the brink of bankruptcy and potentially unable to pay debts.
Organisations in this situation have two options – urgently restructure or become ‘insolvent’. When an organisation decides to restructure, it may need to renegotiate its existing debt or improve cash flow to meet its financial requirements. If an organisation is unable to do so, then it will enter the insolvency process, which usually involves selling business assets and repaying debts.
There are a handful of large specialist firms that offer graduate programs such as McGrathNicol, PPB and Ferrier Hodgson. The Big Four accounting firms, Deloitte, EY, KPMG and PwC, also have restructuring and insolvency practices.
Organisations will usually appoint external consultants because they believe the organisation will become insolvent without urgent intervention. As a graduate, this means working in a high-pressure environment where you must act quickly before the organisation finds itself in an insolvency situation. Expect a hands-on experience from the beginning!
During a restructure, you will learn how to diagnose the cause of an organisation’s underperformance, identify solutions and drive necessary change. The scope for possible impact is immense and can be a rewarding experience.
If it isn’t possible to save the organisation or its business, then your task will be to help wind up its affairs in a fair and orderly fashion. In some instances, your client may actually be creditors who seek to collect and sell enough of the organisation’s assets to reclaim its debts.
As a graduate, restructuring and insolvency offer both ‘behind the scenes’ tasks such as financial analysis and modelling, as well as client interactions.
Working with people whose business is failing can be a highly-charged experience. Australia’s laws forces directors to choose between trying to turn around an organisation on their own or put it into voluntary administration to prevent being personally liable if their efforts fail. This can put a lot of pressure on management and your project. You may also deal with terminated employees and angry suppliers and customers – all of which will help to improve your people skills.
There are typically few barriers to promotion up to manager level. Beyond this, you will be required to bring in new business to become a partner. Working with clients early on, however, means you will have a chance to learn the necessary relationship skills. Larger accounting firms will encourage you to become a Chartered Accountant (CA) by funding further study and allowing study leave.
Working in restructuring and insolvency also requires you to extend beyond traditional accounting and audit. It teaches you critical thinking and business problem-solving skills, which are valuable transferable skills. Indeed, you will find most firms, even those that are reasonably specialist, offer other services including corporate advisory and consulting.
If you discover you don’t like restructuring and insolvency enough in the early stages of your career, you can always look to transfer to another specialisation. Other career paths may include working ‘in-house’ for a bank or at a credit department.
Furthermore, restructuring and insolvency work is often counter-cyclical. You will find yourself busier during an economic downturn when organisations are more likely to need help or are at greater risk of insolvency.
Choose this if you have: