Managing Debt

Posted on by Mark Fernandez

Whether it’s personal or business debt, the very word can inspire a sense of doom and hopelessness. But there are several strategies for small businesses with large debts or financial inefficiencies.

One of the first steps a business can take is to find and connect with a reputable accountant. We can recommend one to you. Accountants offer education, advice, credit management strategies, debt consolidation and repayment programs. The most reputable organisations require an education component to any service they offer so that you or your business avoids falling into debt again in the future.

Another strategy for managing your debt is to step up the collections process. Consider running credit checks on potential customers or offering profitable clients a discount for early or prompt payments.

Also determine whether you need to hire an outside agency to collect on some of your most delinquent accounts. These agencies usually take a percentage of the accounts that they receive payment on.

Be careful when considering whether to sell unneeded assets. While excess property can be converted to cash, finding a buyer for specialised equipment can be difficult and it may be sold at a loss.

Likewise, you need to carefully consider any loan consolidation program. If you have few creditors or stand to benefit from much lower interest rates, it can be a good idea. However, consolidating numerous or widespread debts can be unattractive to potential lenders, and the process might reveal that a business has over extended itself.

For more information or assistance on managing debt contact:

Mark Fernandez

Director

Business Development Alliance

www.bda-online.com.au

mark@bda-online.com.au

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