According to investorwords.com, Debt Management is defined as “A unique strategy developed to help a debtor manage their debt. This strategy is usually developed and implemented by an outside company or organization on behalf of the debtor, usually, because the debtor is unable to sufficiently manage their debt on their own, due to lack of knowledge or because they are overwhelmed by the amount of debt.”
By this definition, it is clear that this process usually involves employing someone to take care of the plan on how you can repay your overwhelming debts. When you find yourself in such situations then you need a highly qualified financial planner who may be able to double as an accountant.
There is no shame in finding yourself and your business in such situations as you would neither be the first or the last to join the group. There is shame however in letting it cost you your businesses by not taking the appropriate steps. Bad debt management can make you go bankrupt or cause your business to be seized by the right authorities. It is therefore important to employ the right person to get you out of the debt situation, but you should also take some steps on your own.
Below are ways that you can help yourself if you own a small business
REVISE OR REWORK YOUR BUDGET
Business budgets help one recognize the sources of income and more importantly, sources of fixed and variable expenditures. Your budget helps you set aside fixed regular payments to your landlord, workers, suppliers, etc.
Before tackling debt situations it is always pertinent for one to get a good grasp of his financial situation especially when he is behind on regular fixed payments be it monthly or yearly. This must have been due to unexpected changes in cash flow which may require one to visit an expert financial planner or advisor or accountant for proper adjustment to be made. There are NGOs out there that may offer free advice hence they could be sought at this stage.
REDUCE YOUR EXPENSES
Going to your financial statement to see what and what you spend on and which cost can be cut is a fast means of helping you get free from liabilities before taking other measures. Do a differentiation between the services or goods that are essential to daily operations of the business and those that are not.
Some subscriptions for services infrequently used and some workspaces that may be let out for rent to save cost on rent may be available. You can also choose to pay some bills up front for the year to get the available discounts and save some more costs.
INCREASE CUSTOMER SALES
In addition to cutting costs, this will also help you get out of debt fast. Look for ways to help improve cash flow, you can choose to give discounts on a certain amount of goods bought from you or give a discount on services to loyal customers. Also, follow up on receivables and you may give a discount on debts paid by customers up front. All of these would bring about a rise in revenue.
EMPLOY THE SERVICES OF A REPUTABLE DEBT MANAGEMENT OR RESTRUCTURING ORGANISATION
A reputable debt restructuring firm is a good alternative for you and your business because even though they may charge fees it is way less expensive than filing for bankruptcy. A firm like Medvisor Consultants will in no time get your business back on its feet if you trust us with the responsibility. Our arsenal of financial professionals in Melbourne includes business accountants, tax accountants, tax agents, business brokers and business planners. They are all readily available round the clock in Melbourne to uniquely solve your financial problems.