How To Stop Being The ‘Meat In The Sandwich’ Between Customers and Suppliers

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This diagram shows the average number of days this business is taking to collect from its customers (green or top line), as well as the average number of days it is taking to pay its suppliers (red or bottom line). We can see this business is paying its suppliers much more quickly than its customers are paying them. This means the cash to fill the gap, has to come from somewhere else e.g. current bank balance, loan or owner cash injection. The cash flow squeeze gap can be avoided by getting customers to pay more quickly, as well as negotiating better terms with suppliers and using all the terms available i.e. not paying before due date.

For more ways to speed up payments from customers download our FREE eBook ‘How To Get Your Customers To Pay On Time’.