Prioritizing Payments

Over the next Several Weeks we will be posting a new and different one-minute video providing business tips and instructional commentary for small business owners.   These tips will range from key metrics to consider to the importance of Business and Cash Flow Forecasting.

What happens when you’re experiencing one of those cashflow dips that many businesses experience where there is simply not enough cash to meet all of your financial obligations? The answer is: prioritize payments. My name is Michael Barbarita from Next Step CFO providing outsourced CFO Services with your know your numbers minute. The priorities of payments that I find most useful when those circumstances pop up are: First, pay employees, next, pay the government, and third, pay the landlord. Then all loan and credit card payments, then trade suppliers, then expense vendors, and then any others, including yourself. Remember, the most successful business owners know their numbers!

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