If your business is struggling financially – take action
Running a business comes with both ups and downs. If you notice that your finances are becoming strained, it is important to act early. The sooner you address the problems, the greater your chances of finding effective solutions. Here are our top tips.
Don’t wait to take action
It can be tempting to hope that the situation will resolve itself, but financial difficulties often become harder to manage over time. Seeking support or reviewing your finances early is a sign of responsible business management, not failure.
Get a clear picture of your finances
Start by reviewing your company’s financial situation. How much money is coming in and going out? Which costs are essential, and which can be reduced or postponed? A simple forecast for the coming months can help you plan ahead and prioritise your spending.
Use our tool to calculate your cash flow budget
Invoice promptly and follow up on unpaid invoices
If you have completed work that has not yet been invoiced, do so as soon as possible. Also review which customers have not paid their invoices and follow up with them. Receiving payments faster can make a significant difference to your company’s cash flow.
Talk to the people or businesses you owe money to
If you are having difficulty paying on time, contact your creditors. In some cases, it may be possible to arrange a payment plan or obtain a deferral. Do not wait until the debt has been passed on to a debt collection agency or other enforcement measures.
Payment defaults can affect your company’s credit rating for up to five years, so it is important to address the situation immediately.
And if you receive a claim that you believe is incorrect, remember to dispute it within the required timeframe.
Keep track of your tax account and preliminary tax
Check your tax account regularly so that you can identify any shortfalls in time. Deficits can result in additional charges and interest.
If your company’s profits are expected to be lower than originally estimated, you should also review your preliminary tax assessment. By submitting a new preliminary income tax return, you may be able to have your tax adjusted and reduce future business expenses.
Submit a preliminary income tax return to the Swedish Tax Agency (in Swedish)
Apply for temporary relief if needed
If your company is experiencing temporary payment difficulties, you may apply for what is known as Rådrum (temporary breathing space). This is a two-month grace period that gives you time to resolve payment issues.
This option is available to those who represent a legal entity, such as a limited company, foundation, or association.
Apply for temporary relief with the Swedish Tax Agency (in Swedish)
Review your staffing needs
If your company’s financial situation deteriorates, you may need to review your staffing levels. If there is insufficient work available, redundancies may become necessary.
Redundancy is a valid reason for dismissal, but there are rules that must be followed regarding matters such as selection criteria, redeployment opportunities, and notice periods.
Making employees redundant due to lack of work
There is also support available to help employees move on after redundancy. Through transition support services, employees who are dismissed may receive assistance with career guidance, skills development, and finding new employment.
Get help before the problems grow
You do not have to solve everything on your own. An accountant, business adviser, or other professional adviser can help you gain a clearer understanding of your situation and identify appropriate measures.
The earlier you seek help, the more options are usually available.
Find a business adviser near you
If the business cannot be saved
Taking action early, creating a clear overview of the situation, and seeking help when needed can make a significant difference when a business faces financial challenges.
Sometimes, however, these measures are not enough, and winding up the business or declaring bankruptcy may be the most responsible option. Here too, it is important to act and not wait too long. Allowing debts to grow unnecessarily will only make the situation harder to manage.