Future planning and debt collection – Don’t be afraid to talk

 Things to remember when getting back to business

Now that the wheels of industry are starting to move slowly forward again, so is the cashflow of funds.
But if you have been surviving on grants or furlough payments for yourself and/or your business, going back to the usual monthly payments of rent/rates and then the additional payments of taxes and supplier costs may make you want to close up shop completely, an avenue that I know businesses are contemplating!
The answer lies in the question – how do you get twenty people in a mini? One at a time!
Things to remember:-
1. Now we are going back to work don’t ignore debt issues
2. Don’t Panic!
3. Here are some solid ways we believe they can be tackled successfully
The answer is also in communication – whatever you want to do, you can accomplish with the right conversations with the right people. I had a client who was facing serious issues a while back due to illness, but the answer for him came from a supplier, another client had help from a major customer when things got tough, why was this? Because they talked to the people involved and between them they came up with the solution. The answers were not take overs or law suits, they were working together to get through the tough times, so they could continue trading in the profitable times.
Whatever the issues are, the first step is to quantify the problem – how much do you owe and who to, often making sure this is right can answer some of your fears.
Secondly, work out who needs paying first, what is most urgent and who can you pay over time? The biggest bills now will probably be the VAT and PAYE for the last 3 months, write to the HMRC offer regular affordable payments over a set period of time and then start paying – even if you have not heard a reply. Often they will accept smaller payments if the plan is adhered to and right now they are so busy, that an easy payment plan sent in writing will be accepted a lot quicker than if they have had to chase you first. As you do not have to start paying yet, now is the time to set this in motion!
Once you have organised the urgent/biggest debts over the smaller ones and the HMRC, see if you can organise payment terms for these as well. Talk to your creditors, see what terms they will be willing to accept. They will want to talk and the rest is negotiation!
Next, look at your finances, I have spoken about this before, but you can look at asset finance, invoice finance and old fashioned loans, if you have previously had good credit ( and many of you will!), most finance houses will look at the last 3 months as a separate issue and ignore them, instead asking for future expected income and cashflows – they will want to lend to you – you just have to make sure you can afford the debt and the finance is right for you!
Lastly, talk to your customers, you might want to adjust payment terms, for bigger projects, ask for more up front deposits to cover materials costs, spread costs as monthly income rather than ‘one hit’ at the end of the contract. When I set up my business, my terms for my clients are to pay a regular monthly amount, it makes them happier as they don’t have a big cost at year end and it has helped me through the last 3 months as I knew I had regular income.
There is a lot more I can say on this subject, I started out in credit control in the late 1980’s and things haven’t changed that much since then! But if you want to know more please drop me a line and remember – you always have more time than you think and there is usually another way around any issue!