Finding Assets to Keep your Company Liquid

money

It is hard to find a business that has not experienced difficulties in billing tools or collecting on third party debts and financial recovery. The fact that many of them are still alive proves that it is possible to find assets to survive a debt tide and keep your business safe in financial dire straits. Let’s have a look at some first-hand solutions.

Cutting indirect expenditure

An office without a coffee machine or a water cooler is not a trendy office. Many entrepreneurs, especially the younger ones, like to invest in appliances and machines that are not actually direct, income-yielding assets. If you are not able to pay your bills or interest rates, a cutting-edge mobile and a water cooler should not be purchased at all. Also, during a difficult period in a company, every single item that does not bring direct profit should be sold, to collect as much cash as possible.

Controlling personal expenses

Using the money from your business account for personal use is a very dangerous practice. This habit, also known as owner’s draws, can harm the entire business, if the owner in charge of the business account gets carried away by temporarily outstanding business results. In an unstable market, today’s success can turn into a tomorrow’s failure. Every business owner should know that their own existence, as well as the future of their employees, depends on their business wisdom and modesty. So, take it easy on the personal expenses with the company’s money.

Negotiating longer payback periods

A company that is not liquid should try to buy some time to sort out the current problems. Here is where your ability to negotiate and your track record of polite business collaboration come on stage. When you face an inability to pay for your liabilities, you should try to ask your suppliers and vendors to wait for a month or two for a payback. That will buy some time to make a short investment cycle and maybe purchase more goods that can be sold in the meantime, to increase the revenue. However, never trick your partners and always try to agree the postponement with them.

Adjusting product placement

When a business does not make enough money to cover its expenses and ensure regular payments for its employees, it is time to make some more serious moves. It is necessary to analyse the production expenses and the income, to see how much money you are left with at the end of the day. Assessing your profitability ratios will give you the right insight into your current position. Business owners should always be proactive. It means that they should even close down a business if it continues to generate financial losses. It is better to move to a more profitable industry than to struggle in a dead market.

Embarking on debt quest

Juggling debts and claims is the essence of successful business management. As we have already said, you should maintain friendly relationships with your vendors, partners and clients. However, if somebody who owes you money dodges every single payback deadline, you will have to show exercise a more assertive approach. In case they remain deaf to your requests, never hesitate to turn to debt recovery service people in order to get your money back.

There are always other ways in which you can find the assets to keep your company afloat, you just need to learn more about them. Consulting a community of professionals like ProOpinion can go a long way towards finding the best solutions for your particular situation.

A comforting fact is that it is always easier to get a period of payback postponement or a special treatment if you are a legal personality, since banks and private creditors do not want you to go bankrupt, but to pay back what you have borrowed or to earn enough to pay your debts. Only when all the alternative solutions have been exploited and nothing is paid back do they really activate their last option – liquidating your business.

Leave a Reply

Your email address will not be published. Required fields are marked *

Finance Mom