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A business recovery service (BRS) is a type of advisory service that aids in helping companies experiencing some sort of distress to develop a plan of action designed to restore those distressed companies to some level of stability. The scope of the recovery services offered will typically focus on finding ways to maximize the efficient use of a company’s available resources, including cash flow, in an attempt to allow the business to survive through a period of economic instability. While much of the focus is on the prudent use of available financial resources, a business recovery service may also provide some counsel in terms of company restructuring as a means of keeping the business operational.
The core focus of a business recovery service usually has to do with company finances. As part of the process, this means evaluating the way that the company spends money as well as how the cash flow is generated. This will usually include assessing the accounts receivables policies and procedures, how the business extends credit to customers, and even the accounting standards used to track the issuance of invoices and the receipt of payments from customers. In addition, the business recovery service will also evaluate other avenues of cash flow, such as returns on investments held by the business.
Along with assessing both the sources and the amounts of cash flow that support the company operations, a business recovery service will also consider the outstanding liabilities currently held by the client. This includes any tax obligations that are pending or past due, balances on outstanding loans or lines of credit, or even balances on bonds issued by the company as part of the funding for an ongoing project. Any debt owed by the company will be evaluated closely, especially in terms of the impact that debt has on the amount of cash reserves currently held by the client.
Once the business recovery service has a solid understanding of how the client’s finances currently stand, the service can begin to make suggestions for altering its money management policies and procedures to maximize the benefits gained from its cash flow. This will sometimes mean refinancing or rearranging existing debt so the stress on cash flow is reduced. At the same time, the service may also evaluate the general operations, including company policies on ordering raw materials, the maintenance of certain inventory balances, and other factors that could be changed and benefit the company in the long term. Consultants with the business recovery service will often work closely with business owners, making specific suggestions for changes in operational procedures that help to increase the amount of resources that can be set aside for contingencies as well as retiring debt more efficiently.
The basic function of any business recovery service is to help customers increase the chances of staying in business, even during an extended period of adverse economic circumstances. When successful, the work of the service helps to strengthen the overall organization so that it operates more efficiently and makes better use of its available resources. At the same time, the business recovery service can help the client develop both short- and long-term goals that ultimately help to retire debt and make the company more attractive to investors.
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