The Background

A long-established, owner-managed SME operating in the services sector had experienced a sudden deterioration in cashflow. Despite appearing profitable on paper, the business was under mounting pressure from:

• Growing HMRC arrears
• A stretched overdraft facility
• Increasing supplier tension
• Directors personally funding short-term gaps

The company’s accountant identified that, while formal insolvency was not yet inevitable, the directors were approaching a point where delay would materially increase risk.

Recognising the need for an independent, specialist perspective, the accountant introduced the directors to Springfields Advisory LLP.

The Risk

At the point of introduction:

• Cashflow forecasts were unreliable
• The directors were exposed to wrongful trading risk if the position deteriorated further
• HMRC enforcement action was a realistic threat
• Confidence, both internally and with stakeholders was eroding

Without early intervention, the likely outcome would have been a forced insolvency process, destroying value and damaging long-standing professional relationships.

Springfields was engaged to act quickly, independently, and collaboratively alongside the existing adviser team.

What we did

Springfields implemented a structured, non-disruptive intervention:

1. Rapid Financial Triage
We carried out a focused review of:

• Short and medium-term cashflow
• Creditor exposure and pressure points
• Trading viability under realistic assumptions

This immediately clarified that the core business remained commercially viable, but required urgent stabilisation.

2. Cashflow stabilisation

• Requestedweekly cashflow forecasting
• Identified immediate working capital improvements
• Removed unhelpful short-term decision-making

3. HMRC & creditor management

• Opened dialogue with HMRC supported by credible forecasts
• Negotiated breathing space while corrective actions were implemented
• Reduced pressure on directors and restored control

4. Strategic Restructuring

• Addressed structural inefficiencies impacting cash generation
• Supported directors in implementing pricing and operational changes
• Provided ongoing oversight during the recovery phase

Throughout the process, Situl and Kishan worked alongside the accountant, reinforcing their role as trusted adviser rather than replacing it.

The Outcome

• HMRC enforcement action was avoided
• Cashflow returned to a stable and predictable position
• The business continued trading without entering any formal insolvency process
• Directors were protected from personal and statutory risk
• The accountant-client relationship was strengthened, not strained

Within 12 months, the business was operating profitably with a far stronger financial control framework in place.

Why early referral made the difference

This case demonstrates the value of early, specialist intervention:

• Value was preserved rather than destroyed
• Insolvency was avoided entirely
• Directors received clarity instead of panic
• The referring adviser was seen as proactive, commercial, and well-connected

Most importantly, the business survived and the professional relationships around it emerged stronger.

Key takeaway for professional advisers

If a client is not yet insolvent, but clearly under pressure, early action creates options.

Springfields Advisory Services provides a safe pair of hands for advisers who want:

• Independent support
• Commercial, non-insolvency-led solutions
• Better outcomes for their clients