What's the best way to tell suppliers we're behind on payments?

Telling suppliers you're behind on payments requires honesty, professionalism, and a clear plan for resolution. The worst approach is avoiding contact and hoping they won't notice—this destroys trust, triggers aggressive collection action, and eliminates any goodwill that might help you negotiate better terms. Instead, contact suppliers proactively before they chase you, ideally before payment becomes overdue if you know you won't be able to pay on time. The conversation should include several key elements: honest acknowledgment that you're experiencing cashflow difficulties without over-sharing unnecessary details about the full extent of business problems; clear explanation of why you cannot pay on time without making excuses that sound evasive; a specific proposal for resolution—this is crucial, you cannot just call to say 'I can't pay' without offering a plan; a realistic timeframe for full payment or installment schedule; commitment to maintaining communication and providing updates; and assurance that you value the relationship and want to preserve it. For example: 'I'm calling to let you know that we're experiencing temporary cashflow issues and I won't be able to pay your invoice of £X by the due date of Y. I wanted to tell you directly rather than let this become overdue without explanation. We have significant payments due from customers in the next two weeks, and I'm proposing to pay you £X on [date] and the balance of £X on [date]. I understand this isn't ideal and I appreciate your patience. Can we agree to this arrangement? I'll keep you updated if anything changes.' Put any agreed arrangement in writing via email to confirm mutual understanding. Be realistic about what you promise—don't commit to payments you're unlikely to make because breaking a renegotiated arrangement is worse than being honest upfront about limitations. Prioritize communication with key suppliers who are critical to continued operations—losing their supply could shut down your business—versus smaller suppliers where overdue payment, while not ideal, won't immediately threaten viability. Different suppliers will react differently: some will be understanding, particularly if you have a long positive history; others will immediately put you on cash-only terms or stop supply entirely; some will threaten legal action. Handle each according to their importance to operations and their reaction to your approach. If suppliers become aggressive, remain professional and don't make promises under pressure that you cannot keep—better to acknowledge difficulty and ask for time to review options than to promise payment you cannot deliver. If you're behind with multiple suppliers, you may need to triage: who must be paid immediately to keep operating; who can wait; and who might cooperate with extended terms. Be aware that preferring certain suppliers over others can create legal issues if you later enter insolvency—liquidators can challenge preferential payments—so document business reasons for prioritization (for example, paying your critical raw material supplier so you can complete orders versus paying a supplier of non-essential services). Consider whether offering security or personal guarantees for delayed payments might help reassure suppliers, but be very careful about personal exposure. If suppliers won't cooperate and you're facing supply withdrawal that makes trading impossible, this is a clear sign you may need professional insolvency advice about whether the business remains viable. The relationship between honest communication and supplier patience cannot be overstated: suppliers who understand your situation, believe you're acting in good faith, and see a realistic plan for payment are far more likely to work with you than suppliers who are kept in the dark and must chase payment aggressively. Throughout this process, never promise payment using funds you know are earmarked for other critical obligations like wages or HMRC, and never falsely represent your financial position—if suppliers later discover you misled them about your ability to pay, they will pursue you far more aggressively and any goodwill will evaporate completely.