How you manage your small business’ debts is very important to its survival. If you’re just swinging in the dark, making cuts or drastic changes to get your debts under control, you’re probably just delaying the inevitable.
You have to have a plan in place, but, more importantly, you have to be able to visualize your debts accurately. A business debt schedule is how you can place all loans, leases, contracts, and payables in one organized table. This format is all about the long-term projections and summarizing your debts so that you can properly navigate them for your creditors and investors.
Every detail of your business debt schedule should be plugged into individual cells using MS Excel, including: total debt, total balance, interest, how much you’re currently paying, the amount of months on your current schedule, maturity, and any collateral you may have available.
This is important to fill out, even if you can recite these things in your own head. This type of organization is what allows you to avoid making costly assumptions or pass up lucrative deals because you’re afraid your debts are abnormally high, but may not be true if you’ve been keeping up with your payments the entire time.
Why you should keep it updated
Having a business debt schedule is not just for your own eyes, but it is a great reason to keep one updated. If your interest rate changes suddenly, you can create a compelling case to your lender or creditor that the increase interest means they will potentially bankrupt your company and, thus, keep themselves from getting their money back.
Your business debt schedule can also show that your business is worthy of receiving new investments or cash infusions, rather than cold-calling around trying to make convincing arguments based on soft numbers and confidence. The financial business likes numbers over risk/reward calls.
It doesn’t matter if you’re a small business startup looking for a loan or if you’re struggling and every year gets harder and harder to keep up with your payments, proper organization can solve you a ton of stress and potentially give you a little light at the end of that long tunnel in a tough economy.
Of course, nothing can replace a proper education in accounting and business finance. Just having your spreadsheets filed with the pertinent numbers may not be enough to properly understand what’s going on with your cash flow, or lack thereof.
You have to start somewhere, though, and you can begin by taking some MS Excel tutorial lesson for free in your spare time. This will allow Excel to do a lot of the hard work for you, by implementing functions and formulas to reflect business proposals or changes in your business, like overhead costs or sales. After you nail that down, then start looking into taking proper business classes online and getting some consultant advice by mentioning that you have a fleshed-out business debt schedule.