Large clothing retailers paying their suppliers late

As a clothing manufacturer your main costs may include wages, machinery, upkeep of machinery, equipment such as materials and of course work space. All of this is reliant on you maintaining a solid cash flow and delivering products to your customers who remain satisfied and continue to use you as their supplier. But what happens when you complete a bulk order for the retailer, the product is up to standard, 90 days has passed by since the invoice due date and you still haven’t received payment? If this is a big retailer they may make up a large part of your business and you do not want to put any strain on your business relationship, but at the same time it is affecting your cash flow and in the meantime you are having to put off taking on other business. What can you do?

To start with when you are outlining payment terms if you emphasise the importance of being paid on time and discuss consequences of payments becoming significantly overdue, it makes chasing the payment much less awkward.

Assuming you haven’t done this and have already contacted the retailer without getting a reasonable response that you are okay with, you may want to consider using a debt collection agency. If you do not want to use a debt collection agency then you can continue to try and contact the retailer and may hope to agree an extension to get paid while maintaining a positive business relationship.

However sometimes a big retailer may feel they can overlook you as their supplier and get away with it. They may also have begun to struggle with their own cash flow and in a sense bitten off more than they can chew. By using a debt collection agency you stand a better chance of getting paid.

After following protocol and still not receiving a valid response from your debtor, litigation would likely follow as well as a site visit and investigation into the parent company to ensure there are assets you can still get paid from.

This process is time consuming strenuous. Using a world-class and regulated debt collection service means less work and time for you than acting by yourself, and also any amount that is successfully recovered is better than not receiving payment at all. Either way it can be a pain for suppliers especially clothing manufacturers where there is a standard to be met and the goods are tangible.      


About DialogWise:

We are building a rare win-win business: SMEs are able to instantly recover late invoices using our platform to access world-class collection agencies, late payers select instant payment plans and issue resolution and collection agencies gain a new revenue stream using simple integration.