Managing your unpaid debts in the company.


When managing a small company (and the same is true with a startup) how you handle arrears will be key to being able to keep the business open. This problem caused the closure of numerous firms in times of crisis. We attempt to break down the factors involved in this issue and offer a series of measures which can encourage business continuity.

  1. All debts can be paid back in instalments. This is one of the most usual measures: spread out payments into instalments that debtors can afford. The period and amount must be set in accordance with each case, taking into account the debtor's ability to pay.

  2. Arrears do not affect all companies in the same way. Profit margins and projections are essential when setting up provisions to be able to cover unpaid accounts. If a company does not have these retained amounts, it is exposed to suffering the consequences of a lack of liquidity.

  3. Negotiation is the best way to solve any problems, by seeking a pragmatic solution which not only serves the interests of the creditor but also takes into account the debtor's ability to pay.

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