CHAIRMAN Eddie Mitchell insists Cherries will stick to the Football League's financial fair play rules and look to reduce the club's losses.

Promotion to the Championship has brought a new set of guidelines for Cherries to follow with league chiefs keen to stop clubs running up huge debts.

Clubs in the second tier are judged to be complying with financial fair play rules if they make a profit or an allowable level of loss. In League One, the regulations restrict the amount of money a club generates that can be spent on player wages.

Cherries pushed out the boat in an attempt to win promotion with owners Mitchell and Maxim Demin sanctioning a number of signings in the past 12 months.

And having reported a heavy loss in the financial year ending July 2012, Cherries are likely to show another deficit when the next set of accounts are published.

Team manager Eddie Howe has already set about reducing the size of the playing squad, while the club also made redundant a number of staff earlier this year.

Tighter controls on finances are expected to impact on the club's transfer activity over the summer with Howe likely to have to cut the wage bill further before he can add players.

In an exclusive interview with the Daily Echo, Mitchell politely declined to divulge information about Cherries' current financial position but said he welcomed the strict fair play rules.

“I think they are a step in the right direction,” said Mitchell. “They will act as an embargo to clubs and, to a degree, restrict the flow of cash going out. That can only be a good thing.”

Asked whether the rules would affect the club's squad-building over the summer, Mitchell replied: “It is something we have got to look at but I think there is a possibility they will influence and have a bearing on what we do in the future.

“We have got to look at what we have spent and where we are going to be next season with players' wages and everything else. Then, we have got to make a judgement on where we can make savings if we need to or where we can get extra revenue.

“If we can come up with something which is positive then we would spend and, if we can't, then we would cut.

“It is something which has been put in place by the Football League and I think it is a good thing. We have got to make sure we work to it, whatever the consequences. In the long run, it is going to help a lot of clubs.

“We have got to work within the rules because, if you overspend, then an embargo will be put on you. There could also be points deductions or fines so we can't break the rules.”

A full explanation of the financial fair play rules appears on the Football League's official website.