Managing late payments in the manufacturing industry

• Cash flow challenge: My customers are delaying payment for completed orders, causing cash flow strain and making it harder to purchase raw materials or pay staff.

• Perfect for: Manufacturers supplying to large distributors, wholesalers, or retailers who often have extended payment terms or delays.

Novuna helps manufacturing businesses unlock cash tied up in unpaid invoices, either through our award winning in-house service or by comparing the market to find the best funding fit for your needs.

We work with providers who understand manufacturing supply chains, help you apply, and make sure you get the right deal to keep your operations running smoothly.

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Understanding late payments in manufacturing

In manufacturing, cash flow issues often arise when large customers such as national retailers or distributors take 60, 90, or even 120 days to pay. While these extended terms are common, unexpected delays can put enormous pressure on working capital, especially when suppliers and staff still need paying on time.

Understanding late payments in manufacturing

• Review your payment terms upfront: Negotiate shorter payment terms or milestone-based payments to secure funds earlier in the production process.
  
• Use invoice finance to bridge payment gaps: This can release up to 90% of the invoice value as soon as the work is completed, helping you cover material costs and wages without waiting months for payment.
  
• Build strong customer relationships: Maintaining a close working relationship with key clients can make it easier to resolve payment delays quickly.
• Keep production and payment cycles aligned: Schedule production in line with confirmed payment schedules where possible, reducing the risk of overcommitting resources.
• Have a credit control process in place: Monitor outstanding invoices regularly, send reminders before due dates, and escalate issues promptly if payment is delayed.

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Funding tools to help manufacturers with late payments

Manufacturers often combine invoice finance with short-term loans or asset based lending to keep production moving. These funding options can cover raw materials, staffing, and operational costs even when client payments are overdue.

How Novuna Business Cash Flow can help

We work with manufacturers to design funding solutions that fit your production schedule and payment cycles. Whether it’s invoice factoring, invoice discounting, or another cash flow product, we’ll ensure you have the working capital you need to meet orders, pay suppliers, and keep your business growing.