Reducing a debt at your end really helps you to avoid collection agencies calling you. There are different ways by which you can reduce your debt by doing simple things. However, Covid-19 has led many business owners and individuals to face such situations. Here are some of the ways that will help you to reduce your debt.
Prioritize your bills
Prioritizing your bills really help you out to manage your cash flow and enables you to pay off your bills in timely manner. However, there is no specific method to prioritize bills, but it all depends upon your situation and the amount of bill that you receive. Here are some of the things that you need to keep in mind when setting up the priority for your bills.
Taxes: Well, this is something that you can not negotiate upon. It is compulsory to pay taxes. If you end up not paying taxes i.e. your business or payroll tax, you make your situation even worse. So make sure that your taxes are paid off on regular and timely basis.
Salary bills: You just can’t let people work for free for you. You will need to pay salaries to the people working for you. This is something that you can’t take off from your list.
Bills from suppliers: Well, this is something that you can look into or negotiate on payment terms help you manage your cash flow. You can negotiate on payment or billing cycle enabling you to strengthen your cash flow.
External debt or short term liability: debts with higher interest rates can make your situation worse and makes it impossible to run your business smoothly.
Collection of unpaid invoices
Cash flow problem can trigger ripple effects on your business, hence it must be sorted out on priority basis to get out of bad situation. If you manage your cash flow properly, it makes it easy to pay off your debts quickly. If others owe you money, put them into collections. A professional collection agency like us can help you to recover your money faster. This will help you to increase your cash flow and reduce your debt.
Consolidating loans
When you are having a different interest rates loan for your business, check with your bank and see if you can consolidate your loans into some lump sum and reduce the over all interest rate payments. This is a good idea to reduce the amount of money goes out of your pocket.
Get in touch with your Suppliers
This is a good idea to get in touch with your supplier and check if they are open for negotiations and payment terms, discounts etc. Some suppliers are good and willing to offer you a very good deals. You need to make sure that you negotiate in such a way that your supplier don’t question your financial strength and ability to pay.
Check out alternative funding resources
alternative financing comes in various forms depending upon your needs you can choose the best option suitable to your requirements. There are also interest-free resources like crowdsources and debt funding.
Some of the businesses have been successful at crowdsources by way of donations of gift certificates etc. However, you will need to be very careful while doing this as you don’t want to end up over promising things that you can not fulfill.
Another way is to get finance through debt funding or invoice factoring. You can sell off your unpaid invoices to a third party at a lump sum amount and the third party will receive or collect money from your customers directly. This will help you to generate immediate cash flow. However, factoring companies may charge high fees depending upon the situation. But it is easy to generate cash flow.
When you are not able to reduce your debt and end up dealing with collection agencies, don’t worry. Professional collection agents like us, help you to get an optimum solution that help you to collect your money.
