Cash control
A short-term rolling cash flow forecast should identify payments, funding requirements and the point at which further action may be needed.
Informal restructuring
Practical action before a formal process is required.
Where the company remains viable and enough time is available, an informal restructuring may improve cash control, address creditor pressure and create a credible plan for continued trading. It is not a substitute for a formal process where the facts require one.
Before the first call
Prepare for the first conversation.
- Keep the current financial information and key creditor correspondence available.
- Identify deadlines, immediate risks and the outcome the board is trying to achieve.
When it may apply
Informal restructuring may be appropriate where there is a viable business and a workable plan.
The correct route depends on the full financial and commercial position. These indicators are a starting point, not a substitute for advice.
- The underlying business can trade profitably once immediate pressures are addressed
- The board has reliable current financial information and realistic forecasts
- Key creditors, HMRC, lenders or suppliers may be willing to engage constructively
- There is sufficient time to implement changes before enforcement action escalates
- Funding, cost reductions, asset sales or revised terms could improve liquidity
- The directors are prepared to monitor the plan closely and act if it is not working
Points to consider
What the board needs to understand.
We explain both the intended benefit and the practical implications before a decision is made.
Creditor engagement
Payment plans, standstills or revised terms must be realistic. The company should avoid making promises it cannot keep.
HMRC and compliance
A plan should allow current taxes and other ongoing liabilities to be paid as they fall due, as well as dealing with arrears.
Operational change
Cost reduction, pricing, stock control, working capital and non-core asset disposals may form part of a credible turnaround.
Funding and value
Any new finance, refinancing or sale process should be tested for timing, conditions, security and the effect on other stakeholders.
Contingency planning
The board should identify clear decision points. If the plan is not viable or creditor action accelerates, a formal route may need prompt consideration.
The process
A clear sequence from advice to implementation.
- 01
Establish the facts
Prepare a current cash position, rolling forecast, creditor schedule, funding summary and overview of the business's underlying performance.
- 02
Test the plan
Assess whether the proposed changes, funding and stakeholder arrangements produce a sustainable outcome under realistic assumptions.
- 03
Engage stakeholders
Approach key creditors, HMRC, lenders, landlords or suppliers with a clear and deliverable proposal where appropriate.
- 04
Monitor and act
Review trading and cash flow against the plan, record decisions and move quickly to an alternative route if the required outcome is no longer achievable.
Common questions
What directors usually want to know.
Every company is different. These answers provide general guidance only.
Is informal restructuring the same as a CVA?
No. An informal restructuring relies on voluntary agreement and does not bind creditors in the way a company voluntary arrangement can.
Can HMRC agree a payment plan?
HMRC may consider an affordable proposal, but it is not required to agree one. The company must normally show that it can remain compliant with current liabilities.
Can the company continue trading?
Possibly, but only where continued trading is justified by the facts, properly monitored and does not worsen the position of creditors.
When should a formal process be considered?
Promptly if funding cannot be secured, creditor action escalates, forecasts are not achievable or continued trading would increase losses or creditor exposure.
A useful first step
Discuss the facts before deciding on a process.
Answer a small number of questions about the pressure facing the company. The initial discussion is free and without obligation. Fees for any formal work are explained before an instruction is accepted.