Incorporation of a business entity involves huge time, risk, investment continuously. Once established, several transactions take place with different stakeholders. Being a business owner, you might end up drafting a list of plans to increase revenue and generate profit, but that’s not the only path to grow your company. One of the vital element that restricts a company to grow is poor debt management.
In the corporate world, the term debt gives rise to a situation where the business ends up building customers who would avail the goods or services but will pay at a later stage. Now, providing such flexibility would help a business to build more customers, but the creation of excess debtors turns out to be harmful. Once you are done with the process of a company set up in UAE, it is essential that companies maintain a separate record for their respective debtors. This need gave birth to debt management, that can refrain you from debtor’s burden.
This piece of article will give you an in-depth knowledge of what debt management is all about and how managing it correctly can boost your business. Let’s dive in.
What Is Debt Management?
In simple terms, debt management is a part of asset management that talks about handling your debtors. A systematic way of managing the debtors can help you to keep a count of the amount that is to be recovered under a limited duration. Now, a debt management plan is required to be prepared as it will help to structure the lending. While doing so, you might come across terms like:
- Debt Counselling- where a counsellor takes the initiative to solve your debt issues
- Debt Settlement-states the actions to be taken to settle the debt issue
- Debt Restructuring-refers to a stage where the debt amount gets restructured due to non-availability of finance
- Debt Consolidation-refers to a situation where one loan is taken to repay the other loans
On the other hand, debt management can also help you to clear your company’s debt accordingly. Let’s take a step forward and understand the benefits.
Benefits of Debt Management
By availing the debt management services, you will be able to:
- Figure out better ways to manage finances
- Keep track of the lending
- Recover the lending on time
- Plan your loans and borrowing accordingly
- Manage your credit score in a better way
- Build a better relationship with your stakeholders
- Helps in proper business management
Debt Management Process
When it comes to the implementation part, a Personal Finance Manager (PFM) will carry the process forward, and you need to undergo the following procedure:
Experts are well-versed with legal terms and have got a higher experience in the debt management field as they have handled multiple cases. Choosing the right professional can help you to make a better debt and implement it accordingly.
2.Interact with Your Professional
Your debt experts will be the point of contact between you and your debtors. So, it becomes essential that they interact with you and get clarity about your business and debtors.
3.Keep Your Documents in Hand
It is recommended to keep all the necessary documents in hand so that it turns out more comfortable to carry out the process. For this, you need:
- Proof of Wage Slips
- Bank Statement
- The reference number of your debtors
4.Set a Debt Management Budget
In this stage, a budget is to be fixed once the experts analyse the loopholes. Your guide will help you to set the budget effectively, with an aim to wipe out any lending issues.
When it comes to the negotiation part, a situation might arise where your debtors might end asking more flexibility. At this moment, an expert can help you to get out of this situation by negotiating with your debtor. Experts are well-versed with the tools and techniques to fetch the debt amount. They end up offering a management proposal. Most likely, your debtors are likely to accept the proposal.
When it comes to dealing with your creditors, they can help you in managing it effectively, so that your credit score doesn’t get affected.
By now you might have got a clear idea as to why debt management is essential. No matter if your business stands as a debtor or a creditor, debt management plan is an essential nerve that can save your company from unwanted losses.
How Can We Help You?
At Commitbiz, our debt experts can help you in the following ways:
- Act as a debt counsellor and restructure the debt plan
- Maintain the credit score
- Lessen the debt burden by channelising it in a proper order
- Debt Consolidation
- Debt Settlement etc.
If you are looking forward to availing for Debt Management Services, we are here to help you. Commitbiz stands as one of the best financial consultants in the UAE and has been helping millions of business investors and entrepreneurs to convert their business dreams into reality. To have a word, do contact us-we’d be glad to assist.