How to save an indebted company?

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How to save an indebted company?

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How to save an indebted company? Is it possible to recover a business in these situations? If this is your situation, stay calm, because saving an indebted company is not impossible.

Although 2021 saw a general reduction in the number of bankruptcies, little more than 95% of orders are placed by small companies. This helps to reinforce the idea that with good planning and a lot of financial discipline, the contract is possible.

After all, the larger the size of the organization, the greater the tendency to be finance department structure style=”font-weight: 400;”> – which does not exclude the possibility of getting into debt, of course. On the other hand, the small entrepreneur has a spectrum of perspective that is easier to analyze, evaluate and assume new strategies.

To help take that first step towards a future with less financial stress, in this post we have put together some tips and techniques on how to save a indebted company that can be of great help.

Do we have your attention? Then follow us on the topics below where we will talk about the following topics:

1. Get information about the company's financial health
2. Track cash flow
3. Renegotiate debts
4. Optimize the production flow
5. Know the value of indicators and metrics
6. Separate personal and business accounts
7. Pay attention to the company's average ticket

Good reading!

How to save an indebted company in 7 steps

1. Get information about the company's financial health

Companies that do not monitor financial indicators, do not have planning and do not project targets for the minimum maintenance of their financial health may be doomed to accumulate debts.

Still, it is essential that you are aware of the gravity of the situation to think about how to save a debt company.

Where do these debts come from, what is the value of each one, and also the fees, fines and interest applied?

This all matters – and a lot – because it allows you and your entire team to organize to ensure the survival of your company, as well as the end of debts achieved gradually.

Otherwise, the scarcity of resources will catch your management off guard, which makes action plans even more challenging and efficient.

Therefore, pay attention to both the origin of the problems and the extent of them. Sometimes, saving an indebted company is not so difficult. Especially, because the possession of accurate information empowers you to solve these obstacles and prevent them from crossing your path again.

2. Track cash flow

Cash flow is basically the history of inflows and outflows of the company's resources. Its monitoring, therefore, serves as a good thermometer of the destination of your income and also of the fixed and variable expenses that add up to day to day.

And what happens when the entrepreneur stops paying attention to it? He can invest more than he should (or could), start to miss the term of financial commitments, accumulate debt and run a gradually greater risk of going bankrupt.

In turn, by monitoring what is happening financially in your organization's routine, you can:

  • verify what the financial resources inflows and outflows went to (and where they went);
  • to know what are the necessary and available values ​​for eventual expenses;
  • identify the metrics that can provide new insights and the rapid diagnosis of shortcomings and bottlenecks;
  • assess the presence (and value) of your company's debts;
  • the available stock.

How to save an indebted company goes directly through the care and attention dedicated to cash flow. And, if you want to know a little more about it, check out our article specially dedicated to cash flow and how to keep accurate monitoring on it!

3. Renegotiate debts

It is in the interest of financial institutions that debts are paid off as quickly as possible. After all, they also cause holes in their income prospects.

So, approach creditors to renegotiate your debt. Just keep in mind, first, how serious they are and how they currently affect your income.

Based on these values, it is possible to approach the institution with a proposal that will not negatively affect you under this new agreement, and will ensure that the creditor receives the amount due.

Remember, then, to act according to the best payment terms for your needs. The point here is not to neglect or evade the payment itself, but to adapt it to your financial reality and take the first step towards saving a debt-ridden company.

It is even worth taking a look at the tips below to have an advantage on your side of the bargain when renegotiating debts:

  • evaluate the entire budget of the organization in order to guarantee the desired values ​​with the new agreement;
  • do not forget to calculate the fees, fines and interest when composing the debt calculation;
  • reduce significantly unnecessary expenses. This exercise is already fundamental in everyday life, but it has a greater weight when the idea is how to save a company in debt;
  • define priorities to settle debts and establish deadlines for the fulfillment of each one – prioritize debts with higher rates and interest;
  • take care that the new payment terms are not exceeded. This affects your credibility for further negotiations in the future.
  • be careful with non-explicit expenses, such as fines.

This is a more sustainable and effective model of get out of debt. Practice it, meet with your team and discover new ways to leave financial issues behind.

4. Optimize the production flow

THE cost reduction, as we mentioned, is fundamental at any time in the company – as long as, of course, the quality of the service provided or the products developed are not lost.

But believe me, there are different ways to reduce expenses. Especially, at times when every penny counts towards reducing debts and maintaining the financial health of your business.

5. Know the value of indicators and metrics

We have already highlighted the relevance of this, but it is worth reinforcing: the metrics and indicators allow you to have no surprises (especially unpleasant ones) when dealing with your finances.

Know in advance what are the objectives of the organization and also the challenges and risks faced. For each of them there are metrics that assist in monitoring and facilitate decision making.

Thus, in the event of any unforeseen event, your team already has one or more action plans to reverse the negative situation. It also helps to identify the mistakes made, as well as the origin of the debts.

6. Separate personal and business accounts

This is a more common practice in micro and small businesses as it is more practical and convenient. It turns out that on a daily basis, these advantages are quite elusive.

Because it becomes increasingly difficult to understand where the income comes from, where the expenses go and what, in fact, is a budget present in the company's cash flow and for your personal accounts.

Consequently, money happens to be used for corporate bonds and the risk of accumulating debt grows, too.

Even though transactions are easy to monitor at your company, make this small effort to split bank accounts. Leave one to deal exclusively with the affairs of your enterprise and another for the costs you have in your private life.

7. Pay attention to the company's average ticket

In addition to preventive measures, you can take the lead and counterattack debts. And a good way to do that is by increasing the average ticket – which consists of the average value that consumers invest in their solutions. To do so, you can:

  • raise the price of its solutions, preventing this number from becoming disproportionate with what is practiced in the market;
  • developing reward programs can help stimulate your customers' consumption;
  • reduce variable costs like cutting expenses, improving profit margins and having more capital to get the company out of the red;
  • offer progressive discounts to customers, again in an effort to stimulate consumption;
  • identify the most profitable customers for the company, favoring the development of personalized strategies.

These are questions, therefore, that can help not only how to save a indebted company, but to develop your brand consistently.

Importance of sound financial management

Finally, it is important to analyze the timing of your financial management and how it can develop. We are talking about courses for professional improvement, internal training for the qualification of its human resources and also on specific contracts for specific areas of the financial sector.

With these solutions, your company will protect itself against these unforeseen events and its staff will evolve gradually and steadily. And, of course, it will serve as a fundamental pillar of how to save an indebted company.

Reduce stress at work and save money

If saving a indebted company is a big challenge, you can be sure that your employees go through the same bottlenecks as you do with their personal accounts.

However, as a way to contribute to the financial education of the team's professionals, companies are implementing tools that give more freedom in relation to their own salary.

This is HR Consultants UKy's proposal. The tool that is changing the way employees deal with their wages and generating more satisfaction and motivation at work.

HR Consultants UKy can be one of the most valued benefits for those who work at your company. Talk to an expert and find out more!


And, if you have any doubts about the tips seen in this post, or if you have any experience in your professional luggage for share with us, leave a comment below!

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