Cash flow problems can happen to any business. Losing a key customer, shifts in the marketplace, seasonality, or even the loss of a top salesperson can all throw things off balance.
When that happens, tough decisions follow — including which bills get paid on time and which ones have to stretch. Over the years, I’ve seen a lot of companies face this crossroads, and I’ve had many conversations with vendors and customers trying to find their way through it.
Did you know? 82% of small business failures are linked to poor cash flow management – yet most of these problems can be spotted and corrected months in advance. Regular A/R reviews, proactive customer communication, and clear payment policies are often the difference between a cash flow crunch and long-term stability. – U.S. Bank study
Here are three pieces advice I have, drawn from my experience in B2B collections and grounded in something simple: respect and honesty go a long way.
Be Proactive
It’s always better to be the one to initiate the conversation with your vendor when you know there’s a problem. Calling before they have to chase you down shows integrity — and it can actually strengthen the relationship rather than weaken it.
Be Honest
Making up stories or excuses erodes trust faster than anything. If you’re asking a vendor to work with you through a cash flow issue, honesty is your best currency. Do what you say you’ll do, when you say you’ll do it. And if the plan changes, go back to step one: call them. Keep changes to a minimum, but stay transparent.
I can’t tell you how many times I’ve run into the situation of someone begging to “work with them because they’ve always been a good customer” — while insisting a check was already in the mail when it wasn’t. Those two messages don’t coexist well. Where there’s no trust, there’s rarely leniency.
Figure Out a Plan
Understanding your cash flow — how and when you can realistically get back on track — is key to negotiating with vendors. Having a plan will help you breathe easier and show your vendor you’re in control and working toward a resolution.
It’s far better to lay out a plan than to leave things vague or uncertain.
Pro Tip: If you don’t already have one, hire a CFO or fractional CFO to help you build a cash flow plan. It’s one of the smartest investments you can make in your business.
Train & Transition Takeaway
At The Collection Dept., we often see that communication breakdowns and ambiguous processes are what delay payments the most. That’s why we created our Train & Transition model: to work side-by-side with teams, building the confidence and consistency to manage these conversations in-house.
Collections aren’t just about recovering cash; they’re about maintaining relationships that support the next sale.
Closing Thought
Remember, your vendor is also deciding how long they’re willing to work with you. The more comfortable you make them feel, by being honest, having a plan, and sticking to it, the more patient and understanding they’ll be.
These conversations aren’t always easy, but they do reveal character. And handled the right way, they can strengthen your partnerships for the long run.