No Payment Terms. No Controls. How We Built a Path to $1 Million in Cash Flow for a Metal Fabricator
- Mike Johnstone
- 6 hours ago
- 2 min read
Situation
Suppliers were setting the terms. The company was just paying them.
This custom metal fabricator had no structured approach to cash flow management in procurement. Payment terms varied supplier by supplier, driven by whoever negotiated harder. Slow-moving and no-move inventory sat on the floor tying up working capital. Freight costs were unmanaged and growing.
Leadership had no visibility into how much cash the supply chain was absorbing or what it would take to free it up.
The money was there. It was just locked in the wrong places.
Actions
We started where the cash was hiding.
On payment terms, we built a playbook for negotiating extended terms with suppliers across spend categories. We modeled the trade-offs between early payment discounts and extended terms so leadership could make decisions with real numbers in front of them. When to take the discount. When to hold the cash.
On inventory, we developed strategies to reduce slow-moving and no-move stock. We identified the items tying up the most capital and built a process to work them down without disrupting production.
Regarding freight, we identified cost-reduction opportunities and recommended strategies to take control of inbound logistics. Every load that ships on supplier terms is a load the company does not control. We proposed shifting that.
For commodities, we recommended a hedging strategy to stabilize material costs and reduce exposure to price volatility in key inputs.
Finally, we proposed a cross-functional cost reduction initiative to align procurement, operations, and finance around shared savings targets.
Results
The work created a concrete path to cash and cost reduction.
Identified path to release more than $1 million in cash flow through payment term improvements and inventory reduction
Built a decision framework for evaluating early payment discount trade-offs against extended terms
Documented freight savings opportunities and inbound logistics control strategies
Provided the executive team with clear visibility into the financial impact of supply chain decisions
Established framework for cross-functional cost reduction across materials, freight, and overhead
The company moved from reacting to supplier terms to setting them.
What This Means for You
If your suppliers are setting your payment terms, you are financing their business with your cash.
There is a better way. We have helped companies just like yours take control of cash flow without disrupting supplier relationships.
Every engagement starts with a free 30-minute call. You tell us where cash is getting stuck. We tell you exactly where to start.
No pitch. No obligation. Money-back guarantee if we do not deliver results in six months.