Poor Cash Flow?
On paper you are profitable but you don’t see or feel the money?
- chronically short of cash?
- bank facility overdrawn?
- spending most of your day chasing money?
- stealing from Peter to pay Paul?
- don’t know where the next wages will come from?
- having to make excuses for late payments?
- creditors knocking on the door/worried?
- embarrassed – having to put up with “knowing” looks and insinuating remarks?
The powerless feeling that comes from not having ready cash can:
- affect your self-confidence and make you less creative/productive
- make you panicky
- distract you/take you away from vital activities
- make you miss opportunities
- start rumours…
- taint the image your creditors have of you
- affect your credit score
What to do about it?
- Identify potential sources of cash:
- your creditors – negotiate extended payment terms – an extra 30 to 60 days?
- deposits – securing part payment (enough to cover delivery cost, at least – up to 75%) at time of order
- stock – selling old stock on a special offer (at old prices?)
- factoring your invoices
- short term unsecured business loan – probably the best choice (easiest to secure and definitely the quickest)
- Take positive action
- talk to your creditors – play open cards with them
- incentivise your debtors with early payment discounts
- offer a discount for full payment up-front
- make over your debtors to your creditors
- Prevention is better than cure!
- Don’t be shy. Be quick and firm about collecting on invoices!
- Avoid mistakes that let people hold back payment
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