Many businesses are closing out 2019 with debt and other liabilities on the books. Reducing business debt is a great and realistic resolution that entrepreneurs can set for themselves in 2020. Reducing business debt helps to improve credit ratings, widen financing options, and removes strains on cash flow. Creating a plan for reducing business debt is not as insurmountable as it may initially seem.
Step 1: Reducing Debt through Consolidation
Some new and small business owners are entering 2020 with debt and liabilities centered around loans. In many cases, those small business owners are balancing payments on multiple loans, each with it’s own installment amount and interest rate. Debt consolidation is a way to combine those loans into one singular loan with manageable installments and interest rates. By having business debt under one loan, entrepreneurs can pay off multiple creditors quickly and efficiently.
Step 2: Stay on Top of IRS Liabilities
It is of the utmost importance to stay on top of IRS liabilities, such as 941 payments. Letting IRS liabilities to slip can impact business credit ratings, lead to tax liens, revenue garnishment, and more. Owing the IRS money is not something to be taken lightly, and paying attention to those quarterly 941 payments will help your business stay in good standing with the IRS. If you cannot make IRS tax payments on time, let them know. The IRS has forms for delays or to work out a resolution on owed taxes.
Step 3: CPA Services
Many small business owners find themselves wearing multiple hats, including the one for in-house accountant. Hiring a CPA or even accounting software can reduce the headaches caused by balancing the books. CPA services can help guide entrepreneurs who are focused on reducing debt and create budgeting strategies.
Step 4: Improving Cash Flow
Boosting cash flow is a great way to ensure there is capital on hand to cover overhead, liabilities, and reduce debt. Accounts receivable factoring is a debt-free method of converting unpaid invoices to capital. Since many small businesses issue invoices with staggered schedules, waiting on payments can cause lag in revenue, which can lead to liabilities and debt. Factoring gives businesses faster access to revenue and the ability to build up capital reserves, which can correct strains on finances.
New Century Financial is a national leader in accounts receivable factoring services for businesses of all sizes. If you are focused on reducing business debt, accounts receivable factoring is a fast and efficient way to build up the capital you need to make payments on loans and IRS liabilities. Contact New Century Financial today to get started.