Being successful in the business world sometimes requires you to borrow money. Unfortunately, it's easy to let debt spiral out of control. A combination of fluctuating business environments and borrowing too much can lead you onto a rocky path. However, there are ways you can work with your accountant to manage your debts.
Review Regularly
Using an accounting service is the best way to keep track of your business's debts. Your accountant can identify how much you're borrowing and whether you're likely to struggle with paying it back. They'll also have a solid knowledge of grants and tax programs so that you can ease your finances elsewhere. Ideally, you'll see your accountant regularly so that you have a solid idea of the direction your finances are heading in. However, if you have a feeling that matters are becoming unmanageable, schedule an ad-hoc meeting. You'll either gain clarity on your financial situation or you'll establish a plan for easing debt.
Chase Your Invoices
It's hard to manage your debts when clients and customers owe you money. This is especially the case when you're using schemes such as working capital, which allows you to access finance in lieu of invoices being paid. Regularly review which invoices are outstanding and chase your clients for them. Don't be afraid to offer payment plans, but do so with your accountant's guidance. If necessary, you may need to use legal means to access the money you're owed. It's also worth reviewing customers who regularly fail to pay invoices so you can establish more fruitful relationships with those who can pay.
Prioritise Debts
It isn't unusual for business owners to find themselves in a position where debts are unmanageable. However, things may be more manageable than you think. Speak to a commercial accounting expert so they can help you identify the debts you need to prioritise. They might be able to help you negotiate lower payments temporarily so you can continue with business activities and acquire the money you need to pay debts. In some circumstances, you may be able to enter a debt management plan. However, if you want to make accessing credit easy in the future, you should make management plans a last resort.
Your accountant may also be able to guide you through refinancing or finding debt solutions with lower interest rates. Always remember, it's best to face your debt problems head-on rather than let them spiral out of control. For more information on accounting services, contact a company near you.
Share