IOFM Exclusive: Focus Group Finds Tariffs Are Contributing to Payment Delays

As tariffs go into effect, payment delays will worsen.

That’s the takeaway from nearly 50 finance leaders recently contacted by IOFM. Additional headlines include:

•    Approximately 40% report that vendor payments are already being delayed – including 11% who are paying more than 30 days later than a year ago.

•    More than 40% are looking for alternative suppliers, creating new sales opportunities.

•    However, just over 25% say they lack confidence in the ability of their vendors to pay them on time, putting pressure on cash flow throughout the supply chain.

In response, the vast majority (74%) say they are not extending payment terms to retain their business. At least not yet.

What makes matters worse is that financial operations teams are largely operating in the dark: nearly three in four shared they have received no guidance or training in response to the new tariffs.

Product Companies are First to Respond to Economic Turmoil

Split by industry, it’s clear product companies are most impacted by the challenging economic conditions. The majority (57%) of product companies are actively looking for alternative suppliers vs. just 31% of service companies. 

Product companies are far less likely to consider extending credit terms than their service peers – 38% vs. 15% respectively.

What’s Driving Payment Delays?

Headwinds were already bad: the Federal Reserve reported in July that auto loan and credit card delinquencies were up significantly compared to a year ago. These trends mean consumers have strained repayment capacity, tightened cash flow pressure and increased risk of defaults.

 
Source: Federal Reserve (July 2025 vs July 2024)

 
Source: Federal Reserve (July 2025 vs July 2024)

It’s not just consumer-facing industries that are impacted by the economy. Compared to a year ago, key B2B metrics are showing signs of a slowdown as well. Cautious growth is the common refrain across key performance reports when comparing July 2025 to July 2024:
•    The CEO Economic Outlook Index dropped sharply (from 79 to 69).
•    The ISM Services PMI dropped slightly (from 51.6% to 50.1%).
•    And, the NFIB’s Small Business Optimism survey dipped (from 98.8 to 98.6).

And this was before a new wave of tariffs kicked in on August 8 at the highest rate since the Great Depression. As the tariffs go into effect, companies’ responses will be crucial to watch. IOFM will continue to track your peers’ plans, processes and performance.