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Four tips you can use to help your company manage debt

by , 10 April 2014
In the most recent Business Distress Monitor revealed that as many as one in four British businesses were struggling to pay debts. But, this isn't only a problem for British companies; South African businesses are also drowning in debt. If you're one of them, use these four tips to deal with debt so you can stay afloat.

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Use these four tips to deal with your company's debt

#1: Recognise and act on early warning signs

Francois Olivier, the Executive Chairman at Prosperian say denial is not a solution to mounting debt.

You need to be honest with yourself and acknowledge if there's a problem sooner rather than later.

'A number of options are available to help deal with escalating debt, which are free, confidential and non-judgemental. And the earlier you take responsibility for bad debt, the more options and the more time you will have to pay it off.'

One of these options is debt consolidation. Read all about it here.

#2: Think about good debt vs bad debt

Olivier says you must use credit responsibly.

'With interest rates expected to continue rising, debt is becoming more expensive and should be reserved for necessities. You don't want to find yourself being burdened by loan repayments long after the utility of the loan has been forgotten.'

But that's just the tip of the iceberg…
 

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Legally pay less tax

139 reasons SARS doesn't want you to see this

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Here are two more ways to deal with debt

#3: Get in touch with creditors

Ideal Corporate Solutions advises you NOT to underestimate the power of communication.

'Get in touch with your creditors immediately to explain your business's situation and difficulties. Aim to reach an agreement with your creditors that offers relief for both your business and them.'

#4: Slash your budget

The site says one of the most effective ways to sort company financial problems out is to reduce your spending.

'Taking various steps such as giving up an expensive office for a home office and an army of remote workers, could be one step to help you slash your budget and avoid the beckoning finger of insolvency.'

There you have it. We hope these tips will help you manage your company's debt before it gets out of control.

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