10 Effective Ways to Manage Company Debt Risk can occur at any time, however small. Anticipate these risks by preparing a backup plan so that the company can face the worst. It also helps companies to be more careful in using loan funds.
Pay on time
10 Effective Ways to Manage Company DebtIn a debt agreement there must be a principal debt, interest and maturity. Debt arrears means increasing the burden of the company. Not only the principal debt that is not paid, but interest on debt will also increase. Moreover, coupled with fines due. In addition, the financial services company where you place the loan will see no good will from your company to pay off. And usually non-bank financial services are very strict about this. It could be a debt collector who immediately intervened to collect.
Avoid Paying Debt with Other Debts
10 Effective Ways to Manage Company Debt Maybe you have heard the term “dig a hole, close a hole” which means paying debt with new debt. This is legitimate, but also risky. Paying debt using other debt will not complete the loan, but instead adds to the company’s burden. Especially if the loan is done in a fast way and greater interest. If this is the only way, then make sure the financial services company chosen is trustworthy, has a legal umbrella, is safe and provides comfort in terms of repayment.
Separate Personal and Corporate Finance
10 Effective Ways to Manage Corporate Debt Businesses that are still on a small scale tend to combine personal money with corporate profits in the same account. If this method is continued, it will be difficult to monitor income and expenditure. Profits and losses from the company will not be seen clearly.
Policies and money management for individuals and companies are indeed different. Especially if it has to do with debt. Do not let personal money run out to pay corporate debt or vice versa. Or it could be that the profits of the financial institutions should be used to repay capital debt installments, other investments and so instead are used for personal gain.
Perform Negotiations and Cooperation
10 Effective Ways to Manage Company Debt When your company decides to owe, you should first negotiate with the lender. With good negotiation there is a possibility that your debt burden is slightly reduced. It could be that you get a loan interest or a mild payment terms. In addition to negotiations, there is also good cooperation. This cooperation will foster mutual trust between you as the borrower and the lender. The ease of making the next loan can be an example. Or even the lender wants to work together to develop your company.
Make neat notes & books
10 Effective Ways to Manage Company Debt Apart from marketing strategies, bookkeeping is also the most important thing to consider in the development of a business. Bookkeeping is the process of collecting and recording data and information relating to business finance on a regular and detailed basis. Organized here is a must do routine and disciplined transaction records every day. Detailed realized by recording anything related to company finances ranging from capital, costs and income, obligations and so forth. This includes debt that should be written in detail both the amount of the loan, the number of installments and the term of payment.