You may run the best-managed business in the world, but there are some things that are beyond your power. If your customers do not pay you on time, you are going to run into cashflow problems, and the likely result of that is debt. The important thing is not to allow the debts to spiral out of control.

Manage everything

Managing debts is part of your overall approach to managing your business, and part of the secret is information. The better the handle you have on where the money comes from and where it goes, the more chance you have of keeping debt under control.

So keep a detailed record of your cashflow, and look out for patterns that show you the likely causes of problems. It may be that there are seasonal factors, or difficulties with a particular sort of supply. You might be able to nudge things in the right direction by simple actions, like bringing forward payment dates on your invoice terms.

Keeping a good credit record is essential. So is getting good advice, and you need it from the right sort of expert. For instance, you could consult a bankruptcy attorney in Dayton Ohio, not as the first step to wind up your business, but to get it going again.

Manage long-term debts

Some of your debts will be the investment loans that you take out to start or to expand your business. These will have been calculated carefully as a ratio of your net income and you do not want to start adding to them unless that income has increased. If your debt servicing gets too close to your income you will be in trouble.

Review your loans regularly. If there is the chance to negotiate a lower rate with the lender, consider it carefully in the light of your long-term plans. You may be able to move your debts to another lender, or lock into fixed interest when the rates are low.

Manage short-term debts

You do not want to annoy your suppliers by getting into the habit of late payments, but nor do you want to pay too soon, so your system needs to be set up to pay promptly when required. Try to negotiate longer payment terms rather than miss deadlines. Allowing your rent and utilities payments to slide can result in your credit score taking a hit.

If you are borrowing to cover short-term issues, make sure you are getting the cheapest rate available. Credit cards are a very expensive way to borrow, and can easily spiral. If you have credit card debt, make it a priority to pay off, or look for a balance transfer.

Related: A Complete Guide to Making a Budget for Your Personal Life and Business


When debts are getting on top of you and your business, it is no good hoping they will go away. You have no choice but to sit down and work out your priorities. To list which debts repayments are essential, which are important, and which can be worked on over time, gives a sense of control which will help you back on track.

Abigail Reeves leverages her many years in the finance industry to write her articles and be a valuable part of several online forums. She hopes to help others by sharing her knowledge on managing money.