I give customers 60-day terms but I have to pay the mold maker in 14 days

i had the same problem bro. then I found a solution: I told customers '5% discount for cash upfront'. some paid upfront some insisted on 30 days. at least margins got squeezed but cash flow improved a bit... what's your margin percentage?

as long as you're working with credit cards you can't get out of this hole bro. interest rates are too high you need to collect your receivables. if there are no customers and you say i'm running a shop try this: put a 2-3% late fee in your written contracts. collect from the closed accounts that signed. stop trying to make others pay the pain.

There are three ways to manage working capital: first, credit cards (the most expensive), second, factoring (expensive but works), third, bank loans (cheap but banks aren't really giving them to manufacturers these days). If your cash cycle is very heavy, raise your prices by 15-20%, though customers will complain. But it's better if the cash situation improves.

Think about it: if you give a 5% discount for upfront payment, and you get the 60-day money now, you're effectively earning over 30% annual interest. So even though it looks like a discount on paper, getting the money quickly is actually a good investment. Customers who know their math will accept it.

A few suggestions: 1- Have your accountant do a detailed terms analysis, see which customer pays in how many days, 2- Set up meetings with the worst payers, negotiate terms or even upfront payment, 3- Ask suppliers to extend payment terms. If these three go together, most of your cash problem is solved.

bro you have a serious problem but once you solve it you'll have your business under control! learn this system gather info on what factoring is, then sit down with customers within two months and discuss the cash situation. it will definitely get better!

Set upfront payment terms give 5-10% discount except for long-term customers, use factoring or take a loan. Do these three in parallel, it'll solve it.

I'm curious too.

Just a heads-up. If the gap between accounts receivable and accounts payable turnover days is widening revenue won't save you.

If you post the result here it will help others too.

There's a trap here, let me mention it. Looking profitable on paper but having no cash in the bank is very common.

This approach has a cost, which isnt discussed. tbh everyone rushing into cash flow crunch gets stuck at the same point.

Thanks, this was very helpful.

Thanks for posting.

Saved. Any unwritten clause becomes a point of disagreement later, as both sides remember it differently.

Don't hesitate to ask; those who don't ask always pay more. This is my opinion, I'm not claiming it's absolute truth.

The discussion got scattered, let me summarize. The answer varies greatly by industry; there is no one-size-fits-all rule.

Good luck with that.

To get into the details: Cutting your own salary is a temporary tactic; if it lasts more than six months, something will break.

Hope this helps.

The opposite happened to me that's why I'm writing. If the gap between accounts receivable and accounts payable turnover days is widening, revenue won't save you.

Of course, it varies if your situation is different.

I didn't know that.