Originally published in Modern Distribution Management
Most distributors consider late payments an unavoidable cost of doing business. They don’t have to be, but fixing them won’t come from traditional approaches.
Distributors’ supply chain is under pressure from every direction. Tariffs are high, retaliatory trade measures are reshaping supplier relationships overnight, and freight costs are volatile. Persistent inflation has compressed already-thin margins, and every customer is stretching their payment cycles while suppliers demand faster settlements.
In this environment, late payments aren’t just an administrative nuisance. They compound every other pressure. But many distributors mistake overdue invoices for a collections problem. In reality, a late payment is the result of misalignment across the revenue lifecycle, including contracts, pricing, billing, and fulfillment.
Distributors that consider the order-to-invoice-to-cash lifecycle as a coordinated system, not a series of handoffs, will find and fix issues before an invoice goes out.
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