May 19, 2026 How to Turn Supplier Terms Into an Advantage

Every mid-market manufacturer can free up cash and reduce costs through supplier terms, whether they have negotiating leverage or not.

By Cole Reifler, CEO, Zenith Group Advisors

While finance leaders at mid-market manufacturers often look at inventory, staffing and other costs to save money, supplier payment terms represent an untapped opportunity. Making payment terms more favorable can free up operational cash and even reduce cost of goods sold (COGS).

Why don’t more finance professionals take advantage of this lever? In my experience, there are two major hurdles, depending on the manufacturer’s cash flow.

The first group has steady cash flow, which gives them the power to renegotiate but internal friction prevents them from taking action. The second camp includes seasonal manufacturers and companies with long supply chain cycles. They face a timing mismatch between when customers pay them and when they need to pay suppliers. For decades, these companies lacked options. They didn’t have the leverage to ask for better terms and relied on debt and asset-backed loans to free up cash. But now, newer financing options exist that give mid-market manufacturers access to tools once reserved for large enterprises.

Both groups can turn supplier terms into a real advantage. They just need different plans.

Stable cash flow: Knowing what to do, but not doing it

When I talk to CFOs at manufacturers with steady cash flow, most of them already know better terms would help. They have the leverage to renegotiate but organizational barriers stand in the way. Five sources of internal inertia come up again and again.

1. Supplier relationships are left alone. While prices typically get reviewed annually, payment terms often escape that same level of scrutiny. Terms set five or 10 years ago stay the same. Change can be awkward or strain relationships and nobody wants to risk a partnership that’s working fine. The result? The company leaves cash on the table.

2. Procurement and finance want different things. Procurement teams, which own supplier relationships, are much more likely to focus on quality and on-time delivery whereas finance wants better payment terms. The solution is marrying both teams’ interests in the form of joint goals that encompass price, delivery, working capital improvement and COGS reduction. When negotiations start from this frame, everyone wins.

3. Nobody champions the change. Changing supplier terms across multiple vendors takes a senior leader who can align procurement and finance around shared goals. That individual needs to treat it as a financial lever, not just a procurement task. Naming an executive sponsor, such as the CFO, adds accountability, pushes through internal resistance, and sets targets that reflect both teams’ priorities.

4. Companies wait until cash is tight. Companies that wait until cash gets tight lose their leverage. Suppliers know when a buyer is stretched and they negotiate accordingly. The fix is organizational. Review supplier terms as part of annual planning, not during a cash crunch.

5. Nobody knows the cost of inaction. Renegotiating payment terms doesn’t seem urgent because most companies haven’t calculated the cash flow and cost reduction opportunity. Show real numbers to leadership to force the conversation. Look at your top ten suppliers and figure out how much cash you would free up by extending each one’s payment terms by 30 or 60 days.

New financing options for cash-constrained manufacturers

Manufacturers without steady cash flow not only lack leverage to negotiate better terms but also need that cash the most to fund day-to-day operations.

Traditionally, these mid-market manufacturers had limited options. They could take on debt or put up assets as collateral. New financing programs require neither, while giving manufacturers the leverage to negotiate better terms, reducing costs and improving working capital.

Supply chain finance lets a manufacturer pay suppliers early through a third-party financing partner. The manufacturer gets more time to pay and suppliers get paid faster. Unlike traditional debt, some programs don’t require collateral or disrupt existing banking relationships.

Supply chain financing in action

A leading mid-market cookie manufacturer with $250 million in revenue, distributing to major retailers, was strained by 60-day payment cycles and high supplier costs. Seasonal demand and rising ingredient prices made the cash flow problem worse. The company needed a solution that could accelerate supplier payments and unlock working capital without disrupting existing relationships.

The manufacturer set up a $10 million supplier credit transaction that provided 100% unsecured liquidity. The structure allowed it to pay suppliers early through Zenith’s funding portal while extending its own payment terms from 39 to 120 days. Suppliers got paid faster than before. In exchange, they offered price concessions that lowered the manufacturer’s COGS by 10%. The company also unlocked 50% more in early payment discounts than it had previously been able to capture.

The full program was up and running in three weeks. No collateral was required. The company’s existing bank lines were untouched. The extra liquidity funded the next stage of growth, while the COGS reduction improved margins for the long run.

The takeaway for finance leaders

Supplier terms affect working capital, COGS, and growth. For manufacturers with steady cash flow, the work is organizational. For those without, supply chain finance has changed what’s possible without requiring debt or collateral. Either way, the opportunity is real and the tools to capture it exist today.

About the Author:
Cole Reifler is the CEO of Zenith Group Advisors. Zenith, delivers insurance-backed supply chain financing that empowers mid-market and PE-backed companies with the liquidity they need, without restrictive covenants or supplier buy-in. Its approach complements your existing capital, enabling faster scaling, optimized cash flow, and stronger supplier relationships, all with a seamless, debt-free solution.

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