Anyone can manage during good times. But when the economy turns downward, businesses can fail because of poor management. As a manager, what should you do differently during a recession? Here are a few of the basics:

Focus on receivables: In difficult times, business bankruptcies rise. In every case, creditors go unpaid. Typically, unsecured (trade) creditors get stiffed. But some manage to get paid, so make sure you're one of them. Do this by developing a strong relationship with the accounts-payable person on troubled accounts. Also, set limits. Establish requirements. And be sure you don't extend more credit to any single customer than you are financially comfortable with. Finally, being firm and managing your exposure does not mean treating anyone disrespectfully. Don't make it personal. You don't want to lose a customer forever just because of tough times.

Postpone unnecessary expenditures: If you are considering spending money on "nice to haves," consider postponing. Especially expenditures that raise your cost base for years to come and are difficult or expensive to reverse. An example would be buying or leasing a larger or nicer facility. You might want to wait until you get a feel for how things will go during the recession before you make a big move that raises your cost base.

Squeeze cash from inventory: Inventory ties up a lot of cash. Good managers need to be good inventory managers, taking care not to over-order or end up with too much that can't be sold. Now might be the time to start reducing inventory stocks and raising cash, especially on slower-moving items.

Sharpen the saw: When sales slow down, you're not as busy, so it's a good time to sharpen the saw. Work on the database. Meet and discuss unresolved issues. Investigate strategic alliances, new initiatives, and new locations. Get out and talk with your customers. It's just like winter: not a time of death, simply a time to shed excess and re-create yourself. Clean up and get in shape and re-emerge as a better, faster, stronger and more beautiful you.

Reduce interest expense: As a broader expansionary cycle grows long in the tooth and recession signs begin to flash, good managers begin paying down debt. Consider using proceeds from selling off excess assets, such as inventory and receivables. But to the extent interest-bearing debt remains, a recession is often the time to refinance. That's because interest rates typically decline during an economic slowdown. If necessary, you also can extend the amortization period (to lower the amount of principal payments). The staff of The Business Owner has been predicting an economic slowdown for a year now. It's here. Could it become a recession, i.e., negative gross domestic product (GDP) growth? Sure could. How long will it last? Well, whether it's a slowdown (lower GDP growth) or a recession, they usually last just a year or two, and we see no reason why this one would be any different. The U.S. economy is incredibly powerful, dynamic and industrious. We believe that the global economy is poised for many years of healthy growth as the benefits of technology, rising literacy rates and lowering barriers to trade drive demand and world GDP. So don't put your head in the sand. Yes, business could get pretty slow for you this year, and possibly next. But good managers know how to take advantage of it.

This article originally appeared in The Business Owner Journal www.TheBusinessOwner.com