There can be many reasons why your company might be facing cash flow problems. You might have had to raise your costs, and lost your customers in the process. You may have faced a lawsuit and had to pay a large chunk of the money that kept your business running. In many cases, cash flow is simply a result of poor account and number crunching, which in turn leads to overspending. However it happened, it’ll be a stressful time for you. But there are things you can do.
Source: Pexels.com
Check the Numbers
The first thing you should do is recheck the figures. Before moving forward, you’ll need to have a clear understanding of your company’s financial situation. Taking a close look at your money might be beneficial in other ways, too – it might show that you have options to improve your profit margins by making a few small changes, such as up selling. It might also demonstrate that you’ve been paying too much for a service and that you’re able to get a better deal just by picking up the phone.
Follow Up On Inbound Funds
You might have a lot of money flowing outward, more money than you have in the bank, but what about the money that you’re owed? Depending on your business, you might have more outstanding cash than you realize. If you have invoices waiting to be paid, follow up on them and stress the importance of them being paid quickly. If the money you’re owed is still slow to come in, you can issue a date by which it needs to be paid, and the corresponding late payment penalty fees that’ll be attached if it’s not.
Closing the Wallet
As well as trying to bring money in, it’s also important that you stop money from flowing out. Of course, you won’t be able to shut the wallet entirely; you’ll have a lot of essentials that you simply need to have in order to function. You’ll need to think carefully about what stays and goes (temporarily). If a service brings in money, then it stays; if it’s non-essential, like say, cleaning services, then it should be stopped immediately if possible.
Get Outside Help
Cash flow problems and the threat of insolvency threatens a significant portion of businesses each year, and as such there are plenty of resources on hand to help you get a grip on the problem. There’s a very interesting site that’s all about business insolvency that should be your first port of call when you first realize the depth of your problems. It might also be helpful to look at outside sources for help with accounting and the like, especially if you don’t feel it’s an area in which you excel.
Talk to The People You Owe Money To
Finally, it’s worthwhile opening a dialogue with the people that you owe money to. While the bottom line balance might not look pretty, many companies are flexible with payments, especially if you can show that you’ll be able to pay within a set time.
