NFI for Early-warning CSR Directive anda insolvency directive: their composed impact on smes. Searching for a new model.

Companies’ crisis and insolvency forecasting using financial data has been studied for decades. The idea that Non-Financial Performance Indicators ("NFPI") can play an important role in a forecasting crisis and insolvency model is gaining ground. Avoiding crisis and insolvency requires close and continuous control over assets able to be liquidated, but often in the effort to keep financial balance, companies risk to sacrifice their ability to generate income. The use of the NFPI could contribute in managing this important critical issue, facilitating not only financial survival in the short term, but also economic recovery in the medium to long term. Starting from the document issued by OIBR that promotes the use and communication of NFPI for SMEs, the paper aims, with a qualitative approach, to select a basket of NFPI to be added to those already provided for by the new Insolvency Code (D.Lgs 14/2019) and elaborated by the Italian National Council of Chartered Accountants to find out if the company is in a loss of viability situation or not. The paper focuses on the following research questions: Can NFPI be used as instruments to better forecast crisis and insolvency risks? Is there a model that SMEs can implement?