12/05/25
**How Having an Accountant Can Help Your Business During Financial Struggles**
In today’s competitive environment, it is essential for every business to monitor and manage its expenses effectively.
An accountant can offer invaluable insights into how your organisation can streamline operations and enhance efficiency.
Additionally, keeping a robust cash flow is vital for sustaining business growth and stability, allowing companies to seize opportunities and navigate challenges with confidence.
Over 80% of small and medium-sized enterprises (SMEs) in the UK experience at least some months of negative cash flow, a risk often exacerbated by revenue volatility and delayed payments.
An accountant can assist in navigating these challenges and overcoming obstacles to enhance and optimise your cash flow.
Liquidity is crucial for operational continuity, as it covers fixed costs such as payroll and rent while reducing the risk of insolvency. Strategic liquidity enables agility, allowing businesses to seize opportunities like discounted assets, pivot their business models, or invest in growth initiatives.
Proactive measures, including cash forecasting, expense optimisation, diversified revenue streams, and lean inventory management, can enhance resilience. Effective cash flow management not only ensures survival but also positions firms to take advantage of recovery and competitive edges.
Let’s explore six strategies to unlock cash from your balance sheet
Many small and medium businesses often overlook their balance sheet assets and liabilities as sources of liquidity. Before seeking additional credit, consider these six strategies to release cash effectively:
1. **Optimize Your Receivables and Payables**
It is essential to analyze working capital gaps (e.g., slow invoicing, early supplier payments) and shorten your cash conversion cycle.
Many companies treat working capital simply as a cost of doing business. In our experience, few consider the adverse effects of extended customer terms, tight payment cycles, and high inventory levels on their true economic value.
A thorough analysis of past transactions often reveals process gaps, unfavourable terms with customers and vendors, and other immediate opportunities to improve working capital.
2. **Divest Underperforming Business Assets**
Identify assets that are costing more than they are returning (low return on invested capital) or business units that are suitable for sale or repurposing.
Significant opportunities to release cash may also exist within long-term assets like property, plants, and equipment.
By analysing the returns generated by these investments, you can identify stranded or non-core assets that detract from overall performance.
Selling or repurposing these assets can free up cash for more valuable activities and postpone planned capital expenditures.
3. **Recover Trapped Cash**
If your business operates through subsidiaries, take the time to thoroughly assess global cash balances and evaluate partnerships, including joint ventures.
This comprehensive review can help you identify and unlock funds that may currently be tied up, allowing for better financial liquidity and opportunity for growth.
4. **Streamline Credit Support**
Consider renegotiating and optimizing the terms of your credit and business loans to enhance your financial flexibility.
By doing so, you can save money and unlock additional cash flow, allowing you to invest in opportunities that drive growth and success for your business.
5. **Reduce Long-Term Liabilities**
Reassess obligations, such as environmental liabilities. While the requirements for compliance remain unchanged, a company may reduce or better manage its liabilities by re-evaluating underlying assumptions.
If credit support exists for a given liability, such as cash or letters of credit, a company may also improve its liquidity.
6. **Rethink Pension Funding**
Explore how your pension savings can help finance your business. Pension-led funding is unique in the UK as the interest paid on the finance goes back to the pension, enhancing the business owner’s wealth.
This can significantly impact your financial strategy by comparing the cost of this financing to other options.
An accountant helps businesses navigate financial struggles by optimizing cash flow, identifying cost-saving opportunities (such as streamlining receivables and payables or divesting underperforming assets), and unlocking trapped cash on balance sheets—especially critical given that 80% of UK SMEs face negative cash flow.
Friendly Assist Accountancy offers tailored guidance, from renegotiating liabilities to innovative pension-led funding solutions, ensuring liquidity, stability, and strategic growth without over-reliance on external credit.
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