Businesses are experiencing cash-flow problems because of a decline in demand for products and services. In addition, they are holding onto cash reserves and prioritizing payment to vendors because of the uncertain economic future. And, like it or not, lawyers are at the end of the list of people to be paid. Even the largest companies are feeling the effects of reduced cash reserves and trimming expenses. As a rule, businesses always have prioritized payments of bills to vendors. But businesses that are having cash-flow problems are forced to take prioritization more seriously. This includes companies with historically strong balance sheets.
Their first priority is making sure that payroll, taxes, communication costs, utilities and office space leases are paid monthly. Next in line are vendors that provide continuous products or services, such as equipment leasing and office supplies.
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