I can't pay my suppliers: what should I do first?

Finding out that supplier bills are due before customer money arrives is stressful. You need a clear view of the dates and amounts before making promises. Start with what can be confirmed today.

Write down the next few weeks

List every supplier amount and due date, then payroll, tax, rent and other commitments. Check cleared cash and customer receipts that are genuinely likely, not just invoices you hope will be paid. A cash-flow forecast makes the low point visible. The forecast builder can help test a delayed customer payment.

Suppose a parts supplier is owed $12,000 on Friday, the bank holds $5,000 and a customer owes $9,000 but has not confirmed payment. Promising the supplier the full amount on Friday assumes the customer pays in time. Work out a plan that remains honest if the receipt is delayed.

Contact the supplier early

Check the invoice and contract first. If you cannot meet the agreed date, explain the situation promptly and propose a specific payment schedule you can support with the forecast. Confirm any new arrangement in writing. Ask about the effect on future supply. A critical supplier may need a different operational contingency from one you can readily replace.

At the same time, follow up overdue customers and pause spending that is genuinely discretionary. Avoid making commitments to buy more stock before you know how existing obligations will be met. Review cash-flow improvements that do not require borrowing.

Know when to get help

If this is not a short timing problem, or several debts cannot be paid when due, speak to your accountant and an appropriately qualified insolvency professional promptly. Company directors have duties that need case-specific legal and financial advice. The Small Business Debt Helpline is a free official support route. If you receive a formal demand, read what a statutory demand means and seek legal advice without delay.

Borrowing may add a repayment to an already strained forecast. Read when borrowing is not the answer before treating it as an automatic fix.

Important things to know

• Do not promise a payment date based only on an unconfirmed customer receipt.
• An agreed extension is useful only if the revised dates are realistic and documented.
• This is general education, not an insolvency assessment or legal advice. Get qualified help early if the business may be unable to pay debts as they fall due.