When Finance Get Really Tougher !!!!!
Posted by Steven in When Finance Get Really Tougher
The day may come when the cash flow becomes an issue that precipitates a business filling for bankruptcy. Bad things do happen to good business people, including honest and even successful companies and departments that have spun momentarily out of orbit. It could happen to our company too. But before the managers climb out the window ledge, turn themselves over to authorities or book a flight to Rio de Janerio, they should ask themselves the following five questions 
1) Have I done my best in negotiating with the creditors and suppliers to become partners in helping me out of this cash crisis? Do they understand the severity of my situation? Have I been honest with them in terms of cash availability and payment terms ?
2) Have I done my best to collect all current and past due accounts receivable? Have I been honest with them and offered incentives for prompt payments?
3) Have I considered alternative finances, including short term bank loans, extended credits and other revenue resources to free up funds?
4) Have I cut loose from non crucial creditors, paying them just enough to remain legally viable?
5) Have I reduced all unprofitable sides or lines of my business that may have been draining cash and other resources from the organization
Once the managers have answered these questions they should be able to come back in room the ledge, forget about calling the cops, and cancel their travel plans. The situation probably seems a little less desperate now. However, if the things still seems hopeless, it’s probably a good idea to consult with an attorney to discuss bankruptcy
1) Have I done my best in negotiating with the creditors and suppliers to become partners in helping me out of this cash crisis? Do they understand the severity of my situation? Have I been honest with them in terms of cash availability and payment terms ?
2) Have I done my best to collect all current and past due accounts receivable? Have I been honest with them and offered incentives for prompt payments?
3) Have I considered alternative finances, including short term bank loans, extended credits and other revenue resources to free up funds?
4) Have I cut loose from non crucial creditors, paying them just enough to remain legally viable?
5) Have I reduced all unprofitable sides or lines of my business that may have been draining cash and other resources from the organization
Once the managers have answered these questions they should be able to come back in room the ledge, forget about calling the cops, and cancel their travel plans. The situation probably seems a little less desperate now. However, if the things still seems hopeless, it’s probably a good idea to consult with an attorney to discuss bankruptcy
