My list of creditors is growing. Help!

Dear Aunty B,

My list of creditors is growing and I can’t seem to get on top of it.

Now I am worried about my sales falling as our outlook is not looking good. I am restructuring to reduce costs but how do I deal with my creditors, many of whom I have done business with for a long time?

I want to do the right thing and I am finding this current situation very stressful because I know some of my creditors are really struggling too.

LD,
Sydney

Dear LD,

It is a bad place to be, my friend. But you have the right sentiments. The first thing to do is make sure your creditors know your situation. The last place you want to be is in a hole, lying and trashing your own reputation in the marketplace. It amazes me how small the Australian marketplace is and how everyone knows each other. “He doesn’t pay his bills…”; no one should be saying that about you.

Here is what you should do. Sit down with your accountant and work hard on a plan. Make sure you have cashflows and up-to-date info so you know your position on a weekly or even daily basis.

Then sit down with your creditors and explain that you are in a small bit of strife but will pay them small amounts often. Don’t renege on those payments. Whatever you do, don’t go to ground and always take their calls.

If these are long-term partners of yours then they will ride this out with you, knowing you will provide them with the same support one day.

Be smart,
Your Aunty B

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