From the numbers to the change
- Your numbers sayCreditor days up from 40 to 75; supplier calls every week
- The cause underneathCash is short, so payables are the release valve; the actual cause is not addressed
- What changesFix the cash cause, agree payment plans with key suppliers, protect the critical ones
- What to expectCreditor days back to terms and trust rebuilt
An illustration of how the thinking runs, not a client result.
The numbers to open first
Take the payables ageing by supplier and the last 12 months of purchases.
| Number | How to get it | What worries us |
|---|---|---|
| Creditor days | Payables / purchases x 365 | Rising for three quarters |
| Overdue by supplier | Amounts past agreed terms | Concentrated in critical suppliers |
| MSME dues | Amounts to micro and small suppliers beyond the permitted period | Any significant amount |
| Cash covered by stretch | Increase in payables vs cash shortfall | The stretch equals the shortfall |
Likely causes, and how the numbers test each
| Possible cause | What you would see in the numbers |
|---|---|
| Cash shortage elsewhere | Debtors or stock rising by about what creditors rose |
| Loss funded by suppliers | Operating losses; creditors rising with them |
| Disorganised payments | Pay cycles random; relations decided by who shouts loudest |
| Disputes | Withheld payments on quality or quantity queries |
What to change, in order of effect
List every supplier by criticality and amount.
Decide who must be paid, who can wait, and who can be talked to.
Fix the cash cause
so stretching stops being the release valve.
Offer dated payment plans
to key suppliers rather than silence.
Pay MSME and statutory dues on time.
The cost of default is higher than it looks.
Rebuild a payment calendar
with certain days for certain classes.
Business under pressure? Let a CFO read your numbers.
A senior CFO reads them with you and tells you what is really going on. No cost, no obligation.
What to expect, and when
Honest plans with suppliers tend to be received better than silence. Stabilisation of payables follows stabilisation of cash, usually within a quarter or two.
Mistakes that make it worse
- Paying whoever shouts loudest.
- Telling different suppliers different stories.
- Ignoring MSME and statutory dues.
- Treating stretching as free financing.
Go deeper
CFOAvatar complements every turnaround
A human CFO sees your business at the review. Problems do not wait for the meeting. CFOAvatar is connected to your accounting data and checks your numbers every day, so the scoreboard in a turnaround is always current. Ask it what an owner in trouble would ask:
What owners say after the numbers started talking
Their structured MIS reports have given us clear visibility into our business performance, enabling faster and more informed decisions. The budgeting and cash flow monitoring system introduced by their team has helped us plan our funds more effectively and manage our operations with greater confidence.
What truly sets them apart is their ability to dive into the details—cash flow, operations, and compliance—while simultaneously offering strategic insight that supports long-term decision-making. Their guidance has always been practical, thoughtful, and tailored to our specific needs rather than one-size-fits-all solutions.
They even worked with us to finetune our software (Gross Mart) so we could get micro-level details on various aspects of the business. On top of that, they streamlined our receivables follow-up process and provided valuable guidance on bank loans and valuations.
Quoted word for word from our clients. Read more client words →
Questions owners ask us
Is paying suppliers late a problem?
A short delay that the supplier has agreed to can be normal. Persistent, growing delays signal a cash problem and risk your supply.
What is the MSME payment rule?
Buyers must pay micro and small suppliers within the period set by law; delays carry interest and affect tax deductions. Check the current provisions and your suppliers' status.
Which suppliers should I pay first?
Statutory dues, salaries, and critical suppliers whose stoppage would halt sales.