Many many businesses in Ireland are now suffering from severe cash flow issues below I have listed a few do’s and dont’s which I have tried and tested with clients and I’m confident work.
Communicate with all your creditors (including the bank!) and be as honest as you can.
Cancel all direct debits you can, This gives you improved control over making payments
Use bank transfer as opposed to cheque’s, again this gives you further control as the cash leaves your account instantly and there’s no surprise cheque being cashed when your not expecting it.
Cut ALL unnecessary spending, Unfortunately this includes staff wages. You may need to be absolutely ruthless to survive. Don’t let your personal opinion get in the way think in terms of the value added by the cost
Offer a small settlement discount to encourage debtors to pay on time e.g 2.5%
Panic! it wont help you make rational decisions, Its only money and unless your an undertaker your not going to have to deal with dead bodies! Everything is fixable, most successful entrepreneurs have been bankrupt at least once.
Bury your head in the sand and ignore the problem. This is so appealing but it will make things a million times worse.
Let cheque’s bounce it makes you look very bad and scares creditors into making rash decisions
Let your debtors build up, You must control what your owed and not let it creep above what you owe out.
Make sales to customers who are unlikely to pay up (sounds silly but people do it in times of desperation)
Be afraid to cut off lines of credit to consistent bad payer’s it may spur them into catching up
Hold excessive stock, This ties up the most scarce resource in most business’s (cash)
I am happy to offer a no cost confidential consultation to readers on their cash flow situation. It makes a big difference to get a third party professional to review your situation.