A supplier payment proposal needs dates your cash plan can support
The supplier asks for a payment proposal
Suppose a supplier wants an answer today about an overdue account. You could offer three equal weekly payments, but your biggest customer has not confirmed when it will pay. An attractive schedule may be impossible to deliver.
Prepare the proposal from the business's cash position. If the business cannot pay debts as they fall due, obtain qualified advice promptly rather than treating another payment promise as a solution to the underlying problem.
Start with the reconciled balance
Confirm which invoices and credits make up the amount under discussion. Keep any disputed item visible and separate from the proposed treatment of the agreed balance. An instalment spreadsheet should not quietly concede an amount the business is still checking.
Record the date and version of the reconciliation so the supplier can understand exactly what the proposal covers and what remains unresolved.
Test each proposed date
Place the proposed payments into the cash forecast alongside expected receipts and other outgoings. business.gov.au explains how a cash flow statement records opening balances, incoming money and outgoing money to calculate closing balances.
Mark uncertain receipts as estimates. Test what happens if the customer payment arrives later than expected. A proposal that works only with a best-case receipt needs further work before it is offered.
Explain assumptions without oversharing
Give the supplier a clear proposal with amounts, dates and the account it covers. Explain material conditions honestly, including any receipt on which the timing depends. Do not describe a conditional plan as an unconditional commitment.
Consider what financial information is appropriate to share and seek advice if the proposed arrangement includes security, guarantees, releases or unfamiliar terms. These details can change the significance of a simple-looking payment schedule.
Keep acceptance and monitoring together
Retain the supplier's written response and clarify changes before treating the proposal as agreed. Assign one person to check upcoming payments against actual cash and to flag a shortfall early.
Do not assume sending a proposal stops collection activity or changes existing rights. The effect depends on the circumstances and agreement; obtain advice where that matters.
Prepare one realistic proposal today
Choose the overdue supplier account needing a response, reconcile it and test proposed dates against both expected and delayed receipts. Take unresolved affordability issues to your accountant or adviser before promising money.
The useful outcome is a proposal the business understands and can monitor, with uncertainty made visible before either side relies on the dates.