Cash flow emergencies are common among small businesses. There are times when the financial problem is the result of inadequate financial management, inadequate systems, insufficient marketing strategies or poor planning.
When business owners experience cashflow problems, the first step is to employ the services of an Accountant to review the books and help determine ways to reduce costs, minimise taxes, improve receivables, and even out cashflow.
Chase up your debtors
Chase up as many outstanding payments as you can. Explaining your financial situation to them may attract a faster payment. For clients that are not able to pay you immediately, put in place a payment arrangement. Remember, you have already sold to these clients and have incurred expenses in doing so, making this strategy paramount to your recovery.
Research alternative finance options
Talk to your bank and see if there is any short term funding available. Business owners must check their line of credit to find out if there is still room to borrow more. The owner can also ask the bank to increase one