1. From Protecting Suppliers to Protecting Working Capital
During the pandemic, many large manufacturers prioritised supplier payments to keep their ecosystems afloat. Fast-forward to 2025, the opposite is true. With raw material inflation, energy volatility, and recessionary pressure in key markets like China and Europe, corporates are now hoarding cash.
Global corporates are defending their balance sheets by sacrificing supplier liquidity—extending terms, delaying approvals, and disputing invoices at scale.
2. Late Payments as a Deliberate Cost-Shifting Strategy
Research from Chicago Booth Review confirms what many suppliers already know: late payments are often strategic. Larger buyers calculate which suppliers they can delay without consequence, often sparing only their most critical or high-leverage vendors.
In 2024, the Good Business Pays “Slow Payment Watchlist” named and shamed corporates like AB InBev, Reckitt, and Mondelez for taking over 100 days to pay suppliers. This isn’t negligence—it’s a deliberate reshuffling of cash responsibilities from buyers to vendors.
In effect, SME suppliers are becoming the de facto lenders to their largest clients—without consent, interest, or protection.
3. Suppliers Trapped in a Crossfire of Conflict, Cost & Complexity
Global logistics in 2025 remains unpredictable:
- Panama Canal restrictions due to climate-related droughts
- Suez Canal rerouting after Houthi attacks in the Red Sea
- Sanction-related detours due to ongoing Russia and Middle East conflicts
These disruptions have inflated shipping rates, slowed delivery timelines, and triggered payment disputes—as buyers cite delayed performance to withhold funds. Freight, industrial machinery, and chemical manufacturers have been hardest hit, with average payment delays now exceeding 30–60 days globally.
The result? Suppliers face higher costs at origin and delayed payments at destination—a deadly squeeze for mid-market and SME manufacturers.
4. Post-Pandemic Overcapacity & Declining Demand
From North America to Southeast Asia, many manufacturers are now contending with post-pandemic inventory overhangs. Categories like furniture, apparel, and electronics are still suffering from reduced B2B and B2C demand.
To remain viable, suppliers are accepting unfavourable payment terms, choosing to secure contracts at any cost. This dynamic is pushing the weakest suppliers into a race to the bottom, where cash flow management becomes nearly impossible.
