insolvency-in-ireland-dealing-with-business-debt-150x150If there is one thing that all businesses would give anything to avoid, it would have to be bad debts. Debt never signifies good news for a company, and the liquidation and the bankruptcy of a company is almost always due to too much debt that can’t be repaid. Not getting into a state of business insolvency is quite easy in concept; the only thing you would do is to avoid having debts. The problem with this simple concept is that it is easier said than done, as thousands of companies can attest to.

Dealing with business debt isn’t easy, because it also means dealing strictly with your loyal customers. Late payments from customers and clients make up almost 25% of all business insolvencies. To sort this out, you may opt to stop depending on the payments from invoices of customers and clients that don’t always pay on time. Though they are loyal and some of them could be your major clients, late payments put your own business finances under stress, and this can put your company at a greater risk of insolvency.

Nobody wants debt, but business debt is part and parcel of regular business life. If you want to avoid incurring too much debt, make realistic forecasts with regards to your cash flow. If you want to avoid being late paying your own creditors, always assume that your clients will pay you at the latest possible time. This way you can end up with a margin when they pay on time. Never rely on a single client alone because when you do so, you would have a problem when if that lone client encounters financial problems themselves. Your business depends on your clients, and having as many clients as possible should be your goal.

The secret to recovery from debt is for a business to acknowledge when there is a problem early on. Debts are a normal part of business life, but having long-standing debts could make your business situation worse. Of course, you would have to pay your suppliers and financiers, but make sure that they know if you are experiencing a temporary issue that could result in a late payment to them. When they understand that it isn’t entirely your fault and the situation is temporary, they are a lot more likely to be understanding and cut you some slack. Dialogue with your creditors is key when there is a difficulty.

Debt advice is available to businesses that want to reduce their debts. Debt advisers offer advice on debt settlements and debt consolidation services, especially for businesses that have multiple outstanding debts. Dealing with business debt can be manageable and less stressful when you tackle the issues early, and get good business debt management advice.

This article was written by Robert Potter of RP Consulting, a professional process and training company based in Dublin, Ireland. For more information and advice Contact Us here