Top 5 Exposures for a Business Facing a Crisis
Partnerships are not clear. Handshakes can work in the sunshine, but when stormy clouds come, such as difficult financial situations or cash flow strains, partners in a business may be tempted to take out larger draws to keep themselves personally afloat. Resist the urge and make sure you have agreements that specify how bank access and distributions work. Revise or put contracts in place.
Employee Policies are not enforced. Even when a business faces hard times, company policies and cultures need to remain intact and enforced. Yes, be compassionate. Yes, be understanding. but don't sacrifice what it's taken years to build over a few stressful weeks. Review/Create employee policies.
Double check insurance is proper. While some events are not insurable, many other bad situations could have been prevented. One common area is a simple rider on your commercial policy called "employee dishonesty". No business owner wants to believe their staff would take money or property from the business, but it happens. Just double check you're covered against this and other risks that could easily be protected. Update Insurance Coverage.
Managing Accounts Receivable. If you don't know how to print an Aging AR Report from your business, learn to do so today. knowing how much money is owed to you as a business (and taking assertive steps to go after that money) is an important factor in keeping your business healthy. You can't drive a car without gas and you can't run your business without others paying you for your products or services. Analyze Accounts Receivable.
Collections Strategy. When a business is in a tough spot, sometimes we just need to learn from our mistakes and do better. One area to do better is to make sure you have a clear plan and strategy for monitoring you Aging AR Report and when to take it to the next level by getting legal providers involved to seek payments from those who still owe you for your products or services. Implement cash flow strategies.