Tips for making payroll when you’re struggling with cash flow

<h1>Being unable to pay employees is one of the biggest indicators that a company is about to become insolvent.</h1>

<p>If it looks like you’re going to struggle to meet this month’s payroll then it’s time to seriously review your finances to see where you can improve cash flow.</p>

<p>Your employees rely on being paid the correct amount on the agreed date to fulfil their financial obligations, so finding alternative means to finance payroll is essential.</p>

<p>Check if you can free up more cash with any of the following tips before borrowing more money.</p>

<p><strong>Collect outstanding invoices</strong> – late payments are one of the commonest causes of business cash flow problems. If you have outstanding invoices, it’s time to get on the phone and start chasing them up.</p>

<p><strong>Forgo your own salary </strong>– reducing or forgoing your own salary is one option to help top up the pot for payroll.</p>

<p><strong>Sell surplus assets or stock </strong> – whilst you don’t want to be selling any stock or assets that your business needs to keep growing, if you do have any excess or old stock that you can sell then the proceeds can go towards payroll.</p>

<p><strong>Ask suppliers for an extension </strong>– If you have a good working relationship with any of your suppliers then you could request an extension on your payment terms for the month. This will free up funds to pay your employees and give you a bit of time to sort out your cash flow problems.</p>

<p>If you’re still struggling to meet payroll, then it’s time to look at alternative means of funding.</p>

<p><strong>At The Insolvency Advisor Organisation, we can advise you on several services to help you meet payroll, including credit and lending facilities and payroll finance.</strong></p>