IOFM Exclusive: Focus Group Finds Tariffs Compound B2C Challenges

Businesses – especially those that sell to consumers – are facing daunting tests in this economy.

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.

And this was before a new wave of tariffs kicked in on August 8 at the highest rate since the Great Depression.
 

Source: Federal Reserve (July 2025 vs July 2024)

Source: Federal Reserve (July 2025 vs July 2024)

With these issues in mind, IOFM reached out to 27 finance leaders to learn how they are handling these trends. Here are the key takeaways:
•    Just over 40% report that vendor payments will be delayed – including 15% who are paying more than 30 days later than a year ago.
•    Roughly half are looking for alternative suppliers, putting pressure on procurement and leading to a surge in vendor onboarding issues.
•    About 25% say they lack confidence in the ability of their vendors to pay them on time.

In response to these market challenges, AP teams are changing their vendor invoicing procedures – though the vast majority (75%) say they will not extend payment terms to retain their business. At least so far.

Just under half (45%) of the focus group agreed with the statement: “AP is often in reactive mode – rather than a proactive position – as the economic situation evolves.” And one-third shard that decisions are being made from the top down without AP’s input.

So, what are AP teams doing to prepare for what’s to come? The most common steps include re-evaluating suppliers based on their country of origin and increasing scrutiny of vendor terms.

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 Increasingly Proactive

Split by industry, more product companies are actively looking for alternative suppliers than service businesses – 58% vs. 40% respectively.

Nearly two-thirds of service companies are consider changing vendor invoicing procedures – compared to just one-third of product companies. However, product companies are far less likely not to consider extending credit terms than their service peers – 84% vs. 67% respectively.

As the tariffs go into effect, companies’ responses will be crucial to watch. IOFM will continue to track your peers’ plans, processes and performance.