Your Clients Need Contingency Plans

Source: Practical Accountant

Your small business clients can increase their comfort level and neutralize the effects of emotion by creating a plan to deal with adversity if and when it becomes necessary to act.

You can help them deal with a range of issues such as:

• Which people can sustain reductions in compensation.
• A severance policy and its effect on employees who are retained.
• Identifying customers who contribute the most to profits. What must be done to keep them?
• Effects of the recession on these customers.
• The possibility that lease payments become prohibitive.
• Communicating with customers about accounts receivable—a payment plan or offer of discounts for cash payments.
• Deferring payments to vendors.
• Fallbacks available such as home equity, executive salary deferrals, borrowing from family or friends, and asset sales.
• Sale of the company or bringing in a partner.

For the complete article, click here and select “Help Small Businesses Create a Contingency Plan,” in the February 2009 issue.

From Practical Accountant, February 2009, SourceMedia Inc., One State Street Plaza, 27th Floor, New York, NY 10004, 800-221-1809.