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Managing Your Bank Payments
By Bizbox
Just because it's harder to obtain credit now--and, by the way, the bailout bill passed the House and was signed into law today--doesn't mean you won't still owe your pre-existing lenders for your pre-existing loans. (This dynamic is sort of the root of the whole problem, in fact.) The first prong of how you should deal with your credit situation is to branch out and find alternate ways of borrowing money: we've given some suggestions on this score.
The other thing you can do in these tough times, however, is more wisely and rigorously manage your cash flow in order to make the same amount go a little longer way in terms of satisfying the bank. Via Independent Street, cash-flow software analysis firm SurvivalWare has some tips; so does the National Federation of Independent Business.
Our favorites:
Make sure your credit report is accurate. There are only three major credit rating bureaus--Equifax, Experian, and TransUnion--so this shouldn't be too difficult. Having a solid credit score is pretty much the be-all end-all, so if there is anything you can do to make yours better immediately, such as correcting an erroneous one, that should be first on your priority list.
First, payroll; negotiate the rest. You can't put payroll off. But maybe you can schedule a later rent payment with your landlord; maybe you can get away with putting off utilities for a little bit.
Collect what you're owed, early and often. This is both a matter of sending out invoices as soon as you can--hey, why not simply invoice more frequently?--and enforcing on overdue payments from customers. Better yet, call up customers whose payments aren't due yet and just remind them, friendly-like, of their impending obligations, and maybe ask them if they could possibly get you their payment earlier.
Get cash upfront. Whether this means changing your policy altogether or just increasing the percentage of a purchase that must be paid money-down, this will help you make your payments.
Trim your workforce. Yes, we mean what you think we mean. We're not in favor of you shirking what payroll expenses you do have(see above). But you may need to cut back on payroll expenses altogether, and there tends to be only one simple way to do that.
The NFIB's first piece of advice is, as Douglas Adams fans know, the motto of The Hitchhiker's Guide to the Galaxy: Don't Panic. Well, don't. Or try not to, anyway.
Comments (0)October 3, 2008 4:31 PM
