Taking Your Business to the Gyms - Managing Creditors

When you find yourself in a situation where you can't pay all of your current creditors, prioritize who you pay and when you pay them. For example, if you are a retail business; Then your suppliers are the most important, because without them you have no products to sell. If you have credit terms, try renewing them. If not, at least try to hold on to your current terms or your cash position will deteriorate. Some may be willing to offer you extended loan terms for a payment plan, but you should judge what to ask for and be sure you can handle all of the plans. Nothing bothers a believer more than breaking agreements all the time.

For this strategy to work, you need to have a clear and detailed breakdown of your exposure by creditor. You should be able to remove it from your account system. If you don't have this information, get it as soon as possible. Without a detailed understanding of your financial situation, you cannot manage your accounts payable situation. However, you need to manage your cash flow very carefully. I would recommend subscribing to online banking if you haven't already. This way, you can view and use your available money on a daily basis when you know you have money to pay your creditors. Making weekly payments to creditors works well, as it's often easier to find £ 250 a week than, say, a single £ 1000

Based on the fact that you can now identify all of your expenses, you can easily see your regular payments. Like most businesses with cash flow difficulties, the creditors that suffer first are rent, interest, and the government. It is therefore not surprising that homeowners are often very aggressive against criminal payers. However, they reluctantly accept some payment differences. If you are dealing with your landlord, I recommend that you contact them directly rather than through their representative.

Most of the rent is prepaid quarterly; Ask your landlord if you can pay monthly. This will significantly save your cash flow if you are likely to reach or approach your limit and thereby generate the cash flow generated by your business. Creditors can only be paid for the money received. Under these circumstances, it is advisable to cancel as many standing orders and direct debits as possible. This will prevent you from going overdraft and being embarrassed by bad check payments or excessive overdraft fees.

The UK government is currently forgiving back taxes and VAT to no avail as it does not want it to drive companies into liquidation. In fact, a recent public statement admitted that she did not have the resources to actively hunt down debts under £ 10,000. However, expect this to change in 2010 when the pressure to collect tax revenue outweighs the political pressure to keep businesses operating.

The most important advice is to talk to your creditors. You won't be the only business in trouble, but if you explain your problems and, most importantly, have a plan to get out of them, you will most likely have a compassionate hearing. Your alternative may be to hire a third party to act on your behalf, as contractors are often too embarrassed to deal effectively with creditors themselves. The faster you deal with the situation, the more likely you are to get the conditions you want.
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