One way you can get some short term breathing space is to talk with your suppliers and ask them if they can give you better terms, even if it’s only for a short period of time.
If you approach the situation with sensitivity, the people on the other side behind the business are people as well, and even though they’ve got wages and fixed expenses to operate their business too, if you’ve got a good relationship with your supplier or creditor, just let them know your situation and be reasonable.
If you’re going to take an extra 10 days to pay, say that you’re going to take an extra 10 days, and make sure you pay at the end of those 10 days. You’ve got to keep constant communication. I think that’s where the problem often lies. Maybe people feel embarrassed about asking, but you’ve got to really think, “Okay, is this going to help the situation or is it going to hinder it?”
One solution could be asking for more or better terms. Instead of 30 days, ask for 45 days across the board. It just depends.
You can’t ask for anything if you don’t have a good relationship with your suppliers, but it doesn’t hurt to ask as long as you’re respectful. It’s not always black and white, but if you do the right thing by your suppliers, then it’s a step in the right direction.
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About The Author: James Huy Vuong is a CPA, Registered Tax Agent, Business Broker, Certified Exit Planner and the owner of Your Accounting Partners, an Associate of Negotia Group. Partnering with businesses from start to scale thru to sale.
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