Tariffs, freight surcharges and changing supplier routes do not arrive as a neat line in your cash forecast. They show up as slightly more expensive stock, a larger deposit, an invoice due before the goods sell, and a bank balance that feels tighter than last month’s revenue suggests it should.

Citi’s 2026 global supply-chain finance survey found that, on average, 6.3% of respondents’ working capital was tied up funding tariff costs. Sixty-nine per cent said that amount had increased from a year earlier (Citi). The survey focused on large companies, so do not treat its percentages as a forecast for your business. Treat the mechanism as familiar: extra cost gets trapped in the cycle before customers have paid.

Working capital is where the pressure hides

Working capital is the cash tied up in ordinary operations. You pay suppliers, freight and duties; you hold stock or do the work; then you invoice and collect. The longer that cycle, the more cash the business needs to keep moving.

When an import cost rises, the margin may not be the first problem. The immediate problem can be that you need more cash to buy the same quantity of inventory. If you cannot pass the cost on immediately, you are funding the difference.

That is why a sales increase can still feel like a cash squeeze. More sales can mean more stock, more duties and more receivables before the cash returns.

Find the money trapped in the cycle

Map a typical product or project from purchase order to final collection. Note the days and the cash at each stage: deposit, production, freight, tariff or duty, warehouse, sale, invoice and customer payment. Then compare the map with six months ago.

Which line changed? Was it price, lead time, minimum order quantity, customer payment terms or the number of days stock sits before sale? A vague concern about “supply-chain costs” becomes manageable only when you can identify the specific part of the cycle eating cash.

Do not forget currency exposure if you buy or sell across borders. A movement in the exchange rate can change the cash required before it becomes visible in the margin report.

Price, purchasing and terms are finance decisions

Founders often treat pricing as marketing, purchasing as operations and finance as something that happens afterward. In a tight working-capital environment, they are all one conversation.

Can you change pack sizes or minimum orders? Can a supplier offer staged deliveries? Can you negotiate a longer payment term after proving reliable volume? Can you ask customers for a deposit, milestone payment or faster payment in exchange for a sensible discount? Can you reduce slow-moving stock before ordering more of it?

None of these is universally right. The point is to stop using your own cash as the default buffer because no one asked a commercial question early enough.

Finance the gap only after you understand it

Inventory finance, receivables programs and supply-chain finance can release cash. They also cost money and can add complexity or supplier dependence. Use them to support a cycle that is sound, not to disguise one that is permanently broken.

Before taking a facility, calculate how much cash is tied up, why, how long it remains tied up and what event repays the finance. If the answer is “eventually, when sales improve,” that is not yet a repayment plan.

For cross-border contracts, taxes, customs duties and financing structures, get qualified advice in the relevant jurisdictions. Rules differ. The operating question travels everywhere: where is the cash trapped, and what can you change before borrowing against it?

You cannot control tariffs or global trade politics. You can refuse to let them remain invisible in your working-capital plan. That is where practical financial leadership starts.

Make the forecast show the uncomfortable version

Use a rolling forecast that shows purchase commitments, estimated landed cost, expected arrival date, stock turns and collection dates. Then run a second version with a reasonable delay, price increase or slower sales cycle. The point is not to predict the next disruption. It is to see how much cash is required if ordinary assumptions become less friendly.

If the second version creates a gap, decide early which lever you would use: smaller orders, a price change, supplier terms, customer deposits, slower expansion or a temporary finance facility. The time to make that choice is before the goods arrive and the cash is already committed.

Keep the customer promise connected to the cost

When costs rise, businesses sometimes raise prices without explaining value, or absorb everything until the margin vanishes. Neither is a strategy. Review which products, customers and orders genuinely carry the extra cost. A targeted change may be fairer than a blanket one.

The strongest supply-chain plan is not the one that predicts politics perfectly. It is the one that keeps your business from financing every surprise alone.