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Late trade credit payments to meet cash flow forecasts
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DOI：10.1007/s11142-026-09985-w.png)
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Abstract
En 中文
We examine whether firms use late trade credit payments to meet cash flow forecasts using unique data on overdue payments to suppliers. We find that firms meeting or just beating analysts’ quarterly operating cash flow forecasts exhibit higher proportions of overdue payments and longer past due durations. This behavior varies with market incentives to meet cash flow forecasts, expected costs to suppliers, and buyers’ flexibility to adjust payment timing. Strategic late payments are concentrated in the last month of the quarter, when managers have better information about actual and expected performance. However, this practice comes at the cost of strained supplier relationships: firms using late payments to meet cash flow forecasts are less likely to start new supplier relationships and more likely to end existing ones.
Keywords:
Real activity management
Late trade credit payments
Cash flow forecasts
Meeting or beating expectations
Buyer–supplier relationships
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