A guide, not advice. This explains how things generally work. A licensed insolvency practitioner will tell you what applies to your company or to you.
I can't pay my suppliers - what now?
Supplier arrears are the most negotiable debt a company has - suppliers want you trading and buying - but they're also where directors most easily create personal problems by paying the wrong creditors in the wrong order.
Negotiate - honestly and early
Suppliers agree stand-stills, instalments, and revised terms every day for customers who call before the account freezes; what burns the relationship is silence, broken promises, and orders placed with no realistic prospect of payment - the last of which is also the wrongful trading fact pattern.
Expect consequences you can plan around: pro-forma terms, tightened credit, retention of title asserted on what's already delivered.
The even-handedness rule
Once insolvency is on the table, paying the suppliers who shout loudest - or the ones you've guaranteed - ahead of the rest becomes a preference a liquidator can unwind; part-payments spread evenly protect both the business and you.
Read the signal
Supplier arrears alone can be a bridgeable working-capital gap - cash flow surgery territory; supplier arrears alongside HMRC and payroll strain are the viability question arriving - and suppliers, who see the ordering patterns, usually know before you tell them.
The strongest negotiating position with any supplier is a credible plan - which is what one advice conversation is for.
Call our licensed insolvency practitioners in Manchester on 0333 023 5090 - free, confidential, and directly with an ICAEW-licensed IP.
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This page is intended for general information purposes only and does not constitute financial, legal, or professional advice. Always take advice from a licensed insolvency practitioner about your specific position.