Unexpected bills or expenses can be difficult to manage. Here are some ways to help you recover control.
1. Prepare ahead of time
Think about how you’d handle the cost of events like hiring extra staff, replacing a key piece of equipment, or taking advantage of a new opportunity. This way you’ll be better prepared if you do have an unexpected expense.
Create an emergency fund for your business like you would for your personal finances. It will act as a buffer in case of emergencies and even if it doesn’t cover the whole cost, it will help reduce the amount you need to find from somewhere else.
2. Check your finances
When you have an unexpected expense, check your cash flow and your emergency fund, if you have one, to see how much you can cover. Look at your monthly budget, particularly your variable costs. These are the areas where you might be able to make immediate savings to help cover any shortfall.
3. Make sure you’re up to date with payments received
Double check if you have any invoices that are yet to be paid by your customers and follow these up.
4. Get assistance
If you’re struggling to meet an expense, consider exploring your options with a dedicated business financial counsellor. The Australian Securities and Investment Commission (ASIC) has a list of places on its MoneySmart website where you can access free financial counselling.
Depending on the type of expense you have, you may be able to get a payment extension or agree to a payment plan with your creditor. Contact them to find out what your options might be.