If you look into your cash flow and realise there is a month where you only have few thousands left in the bank, what should you do?
Here are 10 best solutions that we use to help our business customers to go through the worst financial crisis in past few years:
- Review debtors and see if you can improve debt collection by ringing overdue accounts and offer discount or free surcharge on credit card payment.
- Negotiate with big projects to see if they agree to deposit payment and payment plan for big projects. It is always better to have regular “cash in” than a big chunk of cash by end of project.
- Try Invoice Factoring. This is new term for lot of people. A quick way to explain it is that you sell your invoice to a lender who is willing to give you cash upfront before you get pay from debtor. This is a smart way to use “other people money” and really helpful to relax your cash flow in short term.
- Negotiate with big creditors like ATO to come up with payment plan to spread the payment in a certain period of time.
- Try to negotiate with some big creditors for discount on quick settlement. They might be in the same cash situation as you are...so why don’t try to help each other with cash flow.
- Credit cards: Not many people know that you can pay ATO bills via credit card. That will help you to have extra 30-40 days to pay off the debt in case ATO doesn’t agree with payment plan.
- Overdraft is vital. Why don’t you try to ring up your bank manager and ask for overdraft which will help you to have backup plan for the worst cash situation.
- Commercial loan. This is one of the last things you have to do to massage your cash flow, as it will take weeks to get loan approval. But as long as you have a good cash flow forecast, you will know that you have to get a loan approval 3 months before the worst cash scenario.
- Sell up assets and equipments that is not temporarily used: Computer, Server, Cars, etc. This can help you to have extra few thousands.
- Personal loans from family, friends and your relatives at an attractive interest rate.
Overall, if you always have to ask yourself a question “Why does my bottom line show a huge profit but my bank account has no money?”, just pick up your phone and give us a ring!
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