Help

Help! Cash Flow Problems

Help! When I have cash flow problems I am forced to delay my payments to vendors. I know that you disagree with this approach but what else can I do?
You have either misread something I said in print or misheard something I said during one of my seminars. I fully understand the challenge of keeping your cash flow positive. You are correct in stating that I did not suggest delaying your payments. I advised that no one should arbitrarily decide to delay payments to any vendor. The proper way to handle cash flow problems is to communicate. Many business owners create major problems for themselves because they fail to communicate.

When your cash flow forecast shows that it is heading for trouble you owe it to your vendors to tell them that you are struggling. Call your vendor and suggest that a payment schedule be established. Then, stick to it. Vendors do not want to cut-off good customers. However, when customers take it upon themselves to dictate payment terms after the fact, they are ignoring the legal agreements that were entered when the original payment terms were accepted. In addition, they are forgetting one important fact. The vendor works from a planned cash flow forecast as well as the retailer. He or she has expenses just like you do. When customers decide to alter their payment terms without communicating it to the vendor, a domino effect is created. I called quite a few vendors about this issue and they all agreed to work with any customer who is having difficulty. They all commented that when communication breaks down or lies are told, they take the necessary action to protect themselves. In most cases, that means "cutting their loses" and dropping you as a customer.

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