Liverpool managing director Ian Ayre insists the "pain" associated with the cost of restructuring the squad will be worth the effort after the club posted losses of £40.5million.
The club's debt rose by £21.8million to £87.2million in the 10 months between August 1 2011 to May 31 2012. However, the loss was less than the £49.3million made the previous year and done against the backdrop of no European football, although Liverpool did get to two cup finals, winning one.
But with owners Fenway Sports Group focused on the impending arrival of Financial Fair Play, Ayre stressed there was necessary work to be undertaken. "We are continuing to transition to the point we have been working on for several years under this ownership - which is to continue to improve revenues and manage our cost base effectively," he said.
"The biggest cost base without doubt is player trading and player wages - but these accounts demonstrate that we are still working hard to improve that. I take comfort in the fact that the work we have done, some of which costs us a lot of money in this period and beyond, looks pretty painful at the time.
"But as long as you invest in it and manage it in the right way, then hopefully it bears fruit as we go forward and gives us a better platform to exist on in a different environment and in a world where we are expected to break even. You never take comfort from any business that makes a loss but I am pleased that we're making the progress we are making."
In the period relating to these accounts the club offloaded 11 players all signings by previous managers. The then boss Kenny Dalglish - the cost of whose sacking last May was included in £9.5million of "exceptional payments" - wanted reinforcements for his squad and that meant players had to be moved on to make room.
"We see a big charge within the accounts for amortisation (depreciation in value) of players that have been disposed of within the period that perhaps came in on a higher cost," Ayre told the Liverpool Echo.
"We've made losses as a result of selling them but at the same time we've improved our longer-term position in terms of our wage bill by reducing the wages for those particular contracts.
"These accounts show investment in the squad - players like Jose Enrique and Sebastian Coates - and as we have seen in accounts that flow from that - we will continue to invest in the squad both for improved playing performance but also a far better structure in deals that we have with players.
"So we are fortunate in some sense in that we know we are improving in this year and we are continuing to improve."