Ways to help your business avoid bankruptcy

There is no denying that there are many businesses that are struggling in this difficult economy. Business owners find themselves literally fighting just to keep the doors of their business open. However, it is important to note that if your company is having financial difficulties, there are steps that you can take to help it. You want to try everything you can to keep it out of bankruptcy court, however, business owners should understand that the specifics of that decision will be unique to every business, and their current financial standing. However, if you are looking to improve the finances of your company, here are some ways to help your business avoid bankruptcy-

• Cut the costs-If your business is experiencing cash flow problems, then the first step is to look at expenses. However, many business owners are tempted to begin slashing expenses at random. This is never a good solution. While you must cut enough to bring your cash flow into a better balance, you also need to be careful about cutting to much. If you are not strategic about what you cut your expenses, then you may actually bring about the demise of your business. Business finance experts recommend developing a cash flow analysis that is just for the short term. This way you can determine what bills are the priorities to pay right now. You should also work with your suppliers and creditors, and see if you can get them to renegotiate your terms, at least until your finances are in a better place. Keep in mind that they are far more likely to work with you, when the problem is small, then when you are facing bankruptcy.
• Always pay your payroll taxes-Business finances experts also stress that any business facing financial difficulties, should not delay paying their payroll taxes. You want to make sure that you pay your payroll taxes, on time and in full. It is important to understand that the Internal Revenue Service can hold you personally liable, for the taxes that you have withheld, from your employees' paychecks. The IRS is also most likely to assess penalties on any payroll taxes that are unpaid. Finally, it is important to understand that this type of debt will not be discharged if you end up filing, for business bankruptcy.
• Look closely at your bank accounts-Every business owner should understand that if you owe money to a bank, and have an account at that bank, they can literally take the money that is owed them. Because of this you may want to consider using a business bank account that is located at another bank, where you don't owe money. While this may not always be possible, it is a typical business practice if you can do it.
• Practice full disclosure-If you are struggling to meet your business obligations and want to use debt financing, you will need to disclose your financial situation, to your prospective lender. Many business owners have made the mistake of thinking that if they disclose how bad it is, the lender will automatically reject them. However, you should keep in mind that if you fail to disclose your financial situation, you could later be accused of fraud. You could end up with huge legal problems, so you want to always practice the policy of full disclosure.
• Do not try to hide assets-Many business owners in desperation to save their business, or even when they are facing bankruptcy, will begin hiding their personal assets. This is never a good idea, and this action alone could open you up to fraud charges, should need to file, for a business bankruptcy.