In the context that your business is experiencing cash flow challenges, we can assist you to stabilise your operations. Through our support we aim to bring back trust with your stakeholders.
We consider the following three key stages as we seek to stabilise our client's cash position:
Depending on the severity of the situation, an assessment of available and trapped cash may need to be made in a matter of weeks or even days. Responding quickly is essential.
Once clarity on the cash position has been obtained, the directors and management teams should take immediate action to ensure they can (at a minimum) maintain this position, alongside identifying opportunities to access new money, if required.
The methods we will propose will be tailored to the situation and can take the following shape:
Alongside stages 1 and 2, organisations will need to quickly understand who their key stakeholders are (internally and externally). Management of stakeholders can often be challenging in a stressed scenario, particularly where interests are conflicting and there are significant demands for real time information.
We can help you develop a clear communication plan to ensure consistent messaging across all channels and by taking into account all stakeholders (internal and external).
In the event of financial and liquidity stress, directors must move their attention away from shareholders towards protecting the interests of creditors to avoid wrongful or (in extreme circumstances) fraudulent trading.
We can support the organisation by providing to directors:
A clear view of cash flow, alongside balance sheet position and trading performance (stages 1 - 3);
Evidence of decision making process by documenting all material decisions; and
An indication if they need to consider ceasing of trading to minimise loss to creditors, and mitigate personal liability.
The above course of action shall assist to resolve a liquidity issue but it is not the end game. In some instances a recapitalisation is essential to bring your organisation back to a solvency status.
Our accounting and restructuring teams can assist you in addressing your organisation challenges. Please talk to us.