Resources for Sage X3 Users

Whether you’re launching a new product, expanding your presence, or preparing for seasonal changes, sales forecasting helps you confidently settle on a plan. But how can you be sure of your model? To make the right decisions in your business, you need a good idea of what performance to expect. You probably have a rough inkling of how your sales are doing, but how can you get closer to an educated guess? That’s where the art of sales forecasting comes in. It’s a roadmap of how the market is likely to develop, and what your operation will look like if you hit all your goals. In this guide you’ll learn the meaning of sales forecasting, how to do it well, and which methods work best depending on the scenario you envisage. What is sales forecasting and why does it matter? Sales forecasting is the process of estimating future revenue based on data from your business and the market. You analyze current data like recent sales performance, customer demand, seasonal trends, and active marketing campaigns. You also look at past sales—typically going back 12 to 24 months, though shorter timeframes can work for newer businesses. The right window depends on how stable or seasonal your sales are. You can forecast for any period, such as month, quarter, or year. For example, a quarterly forecast is often more useful than a monthly one when you have long sales cycles or seasonal fluctuations. The importance of sales forecasting is that it gives you a broader view of performance and allows more time for strategy adjustments. Accurate sales forecasts help you manage your inventory, budget, and financial planning more effectively. You avoid mishaps such as overstocking your warehouse or lacking staff when sales take off. This means you can prepare for and act on growth opportunities. A solid forecast builds confidence in your business decisions and helps you grow with fewer surprises. Sales Forecasting: Key Concepts and Definitions Sales forecasting is something of a specialization, with a number of terms you should know if you want to make the most of nuances in the process. Understanding these will help you choose the right forecasting tools and techniques for your business or campaign. Sales forecast: an estimate of future revenue over a set period of time based on data and assumptions. Forecasting methods: the techniques used to create your forecast. Choose the method based on whichever information you think is the most relevant to achieving your goal. It could be numbers (historical datasets or customer buying patterns), expert input (e.g. your sales team), or market trends. Forecasting sales with predictive analytics: AI-based tools and models that analyze patterns in your data to make smarter, more accurate predictions. Qualitative forecasting: relying on human insight—such as expert opinions or customer surveys. Useful when data is limited. Quantitative forecasting: based on real figures, such as past sales numbers and performance metrics. Best when you have reliable historical data. Most businesses benefit from using both qualitative and quantitative methods to build a clearer, more complete forecast. Why Sales Forecasting is Crucial for Your Business When done well, sales forecasting helps you make smarter decisions well beyond production and inventory. It supports cash flow management, hiring plans, and investment strategies for growth. Without a forecast, you’re making decisions in the dark. According to McKinsey, a chemical distributor increased its sales by 6% by implementing more accurate and frequent sales forecasts. These forecasts helped the company better allocate resources and respond to market demand. Gartner predicts that by 2027, 50% of business decisions will be augmented or automated by AI agents. These agents rely heavily on accurate data and forecasting to support complex judgments, making sales forecasting a foundational element of future business intelligence. Forecasting helps you act rather than react, which is the difference between market movers and those who merely stay afloat. Which Departments Prepare Sales Forecasts? Sales forecasting is a cross-functional effort involving several departments across your business. Different departments create their own forecasts based on their unique responsibilities and data needs. These individual forecasts may differ in scope and method, but they can be combined to shape a clearer, more comprehensive view of expected performance across the business. Sales Unsurprisingly, the sales department leads the charge in creating forecasts. They offer first-hand knowledge of the sales pipeline, customer interactions, and expected deal closures. Sales reps and managers can provide bottom-up projections based on current opportunities and past performance. Marketing A marketing team might forecast the impact of an upcoming campaign, product launch, or seasonal promotions. They can share insights into demand for planned initiatives, lead generation trends, and customer engagement metrics that may impact future sales. Finance The finance team ensures the forecasts align with the broader financial plan. They analyze historical revenue data, pricing models, and market conditions to validate projections. This helps them assess how forecasted sales affect cash flow, budgeting, and profitability targets. Operations and supply chain Operational teams contribute by helping align forecasts with inventory levels, production capacity, and logistics planning. Their involvement prevents supply issues—like overstocking or underproduction—that can arise from inaccurate forecasting. Product management Product managers may get involved when forecasts are tied to new product releases or updates. Their knowledge of product timelines and customer needs helps refine projections, particularly when entering new markets or launching major features. Leadership and strategy teams Executives and strategic planners use forecasts to guide high-level decisions—such as expanding into new regions, investing in infrastructure, or adjusting workforce needs. Their macro view helps align forecasts with long-term business goals. Different Forecasting Methods and When to Use Them The optimal approach to forecasting sales depends not only on the data and resources you have, but also on your goal at any given time. Are you planning a new product launch? Testing a marketing campaign? Expanding to a new location? The right forecasting approach will help you prepare more accurately. Historical data analysis looks at past sales as an indicator of future trends. It’s simple and reliable if your business has consistent patterns, but it doesn’t always account for sudden market changes. Example: a boutique fitness studio uses two years of class attendance data to predict demand for its new timetable. Intended result: a 20% increase in class bookings with better staff scheduling. Market research uses surveys, customer feedback, and industry data to estimate demand. This method is helpful for new products or when you’re entering unfamiliar markets but it can take time and resources to gather quality insights. Example: before launching a new skincare product, a cosmetics brand surveys 500 customers. They forecast first-quarter sales with the goal of landing within 5% of the estimate. Expert opinion from your sales team, managers, or industry specialists. This works well when data is limited or when your team has direct customer insights, but it can be subjective or overly optimistic. Example: a SaaS company launching in a new region leans on its sales team’s insight to forecast demand. The forecast justifies hiring two local reps—crucial for long-term growth. AI-driven forecasting leverages the increasing adoption of tech platforms across business operations, which positions you to automate research and analysis. The next section covers this in more detail. Sales Forecasting Process and Best Practices A strong sales forecast reflects the preparation that went into it. Here are the basic steps for an actionable forecast that is more likely to get results: Define your goal: know what you’re forecasting and why. Are you planning inventory? Hiring? Seeking funding? Your purpose shapes your approach. Choose your timeframe: decide whether you’re forecasting weekly, monthly, quarterly, or annually based on your business model and decision needs. Gather your data: pull in relevant sales history, CRM activity, market research, and marketing plans. Make sure the data is accurate and current. Anticipate modifications to the plan: consider factors that may affect the forecast, such as changing customer behavior, upcoming promotions, new product launches, or macroeconomic shifts. These can all influence demand. Study competitors: analyzing your competitors’ moves—such as pricing changes, new product offerings, or market entry—can help you anticipate shifts in customer preferences and market dynamics. Select your method: use historical data, expert input, market trends, or AI tools depending on your business stage and the quality of your data. Build the forecast: apply your method to the data and create a revenue estimate for the period you aim to model. Analyze and share the forecast: review the results to spot trends, risks, or outliers. Are sales trending up? Do you need to adjust staffing or warehouse space? Circulate the forecast across the appropriate teams so they can brainstorm ideas on how to proceed. Best Practices Beyond following the right steps in creating the forecast, we have some recommendations on making the best use of your forecasts. Update regularly: revisit forecasts monthly to keep pace with changes in demand or operations. Stay flexible: adjust your approach when market conditions or internal goals shift. Use the right tools: choose platforms that support versioning, scenario planning, and seamless collaboration. Involve key teams: shared insight leads to stronger accuracy, so bring in sales, marketing, and operations staff in the early stages of your process. Track accuracy: monitor how forecasts match up to actual results over time and refine your assumptions with each cycle. Common Mistakes in Sales Forecasting Even seasoned sales leaders and business owners risk falling into some common forecasting traps. Here are the main pitfalls to look out for, plus ideas for avoiding them. Over-reliance on past sales without current market context Historical data is useful—but not foolproof. If you simply project past sales growth forward without accounting for changing market conditions, you risk missing the mark. Solution: combine historical trends with real-time market intelligence. Factor in shifts in customer behavior, competitor activity, economic conditions, and your own marketing plans. Letting subjectivity override the data Sales forecasts based on gut instinct, anecdotal wins, or overconfidence can skew results and lead to poor planning. Optimism bias is common—especially when individual reps or managers overestimate deal closings. Solution: ground your forecasts in verified data and repeatable processes. Use structured inputs like CRM metrics, conversion rates, and lead scores. Overcomplicating the forecasting process Complex models with too many assumptions or technical features can confuse stakeholders and reduce confidence in the results. Solution: keep your forecasting models simple and transparent. Make assumptions clear, limit unnecessary variables, and ensure everyone involved understands the logic behind the forecast. Failing to update forecasts regularly Customer preferences, sales cycles, and external conditions can change quickly. A forecast made six months ago may no longer reflect the current reality. Solution: revisit and refresh your forecasts on a consistent schedule—ideally monthly or quarterly. Update your inputs with recent sales data, marketing performance, and market trends. Ignoring external influences like economic shifts or supply chain issues Sales forecasts that ignore macroeconomic trends, pricing pressures, or supply chain disruptions can lead to unrealistic expectations and costly decisions. Solution: include external risk factors in your forecast. Build contingency plans for inflation, logistics delays, seasonality, or regulatory changes that could impact demand or delivery. Sales Forecasts Amidst Uncertainties It can feel like a chaotic world and even the most well-prepared sales forecasts can be disrupted by serious, unexpected events. Market volatility, global crises, competitor moves, or internal changes—such as leadership turnover or product delays—can all render your original projections obsolete. Disruptive events can directly affect demand or delay a product’s release by interrupting your supply chain. When these changes occur, the assumptions your forecast was built on—conversion rates, lead times, campaign effectiveness—can suddenly lose relevance. In these circumstances, if you continue relying on outdated forecasts, you risk overproducing inventory, underestimating staffing needs, missing revenue targets, or delaying strategic decisions. You may be trapped, waiting for clarity that never fully returns. The answer is to treat your forecast as a flexible tool, not a fixed plan. To pivot rapidly and effectively, you can: Reassess assumptions: go back to your forecast model and revalidate your core assumptions. Which inputs have changed significantly? Shorten your forecasting window: shift from quarterly or annual to monthly (or even weekly) forecasts to stay responsive. Use scenario planning: build multiple versions of your forecast based on best case, worst case, and most likely outcomes. Leverage real-time data: use tools that pull fresh data from your CRM, website, and external sources so you can adjust dynamically. Communicate often: keep key stakeholders in the loop—sales teams, finance, and ops—so that responses are coordinated and timely. Responsibility for updating the forecast depends on the scale of the change. Small adjustments may fall to the sales or revenue ops team, but major shifts usually involve leadership—typically the CFO, CRO, and other senior stakeholders. Cross-functional input ensures decisions reflect both strategy and ground-level insight. Advanced Forecasting with AI and Machine Learning Modern accounting tools pull data from multiple sources—such as CRM activity, web traffic, and seasonal trends—and use machine learning to identify patterns and shifts. AI takes that data and turns it into real-time insights, helping you respond faster and forecast with more precision. This development is transforming sales forecasting. With predictive analytics, your forecasts adjust automatically as new performance data comes in. These tools can connect with your inventory systems, financial planning software, and CRM to give you a more complete financial picture. Sage AI-powered solutions are a perfect example of this. They reduce manual entry, flag risks early, and let you test multiple scenarios. That’s especially helpful if you’re growing or operating across different regions or product lines. Your Path to Accurate Sales Forecasting Sales forecasting doesn’t have to be complicated, but it does need careful attention. The right methods and tools can take you from guessing to knowing. You’ll make better informed decisions, spot risks sooner, and plan your financial path with more clarity. As your business becomes more complex, AI tools and software integrations will make a big difference. If you need to improve your forecasts, Sage financial planning solutions could be what you’re looking for. Explore our range of tools designed to support growing businesses like yours. Note: Content for this blog post was originally posted on Sage.com by Joe Church Woods, June 27, 2025.

In today’s fast-paced manufacturing environment, every minute of machine downtime can mean lost revenue, delayed orders, and increased operating costs. That’s why leading process and discrete manufacturers are turning to Sage X3’s Preventive Maintenance module to proactively manage equipment, reduce unplanned downtime, and extend asset lifespans, all within their existing ERP ecosystem. What Is Preventive Maintenance and Why Does It Matter? Preventive maintenance involves scheduled activities like cleaning, lubricating, calibrating, and replacing parts to ensure machines operate at peak performance. Whether maintenance is triggered by time, usage, or predictive analytics, the goal is the same: keep operations running smoothly and avoid costly disruptions. According to industry statistics, poor maintenance practices can decrease a company’s production capacity by up to 20%. Conversely, implementing a preventive maintenance strategy not only boosts productivity but also slashes repair costs, reduces energy consumption, and enhances workplace safety. How Sage X3 Elevates Preventive Maintenance The Preventive Maintenance module is purpose-built for manufacturers looking to manage assets in real-time without the burden of integrating third-party systems. It leverages core Sage X3 functionality and enhances it with specialized tools to handle all aspects of maintenance planning, execution, and reporting. Key capabilities include: Automated job ticket release for recurring tasks or ad-hoc repairs Real-time equipment tracking across multiple sites and currencies Usage-based measurements to schedule maintenance when it’s truly needed Full repair cost tracking, including labor, materials, and resources Regulatory compliance tools supporting ISO, FDA, OSHA, and EHS standards Detailed reporting and audit trails for improved decision-making and accountability Tangible Benefits for Your Business Tracking these physical assets can help your company to: Boost productivity and profits by reducing inefficiencies and costly downtime Optimize inventory levels and purchasing costs Benefit from great operational flexibility Ready to See It in Action? Register now for Sage’s upcoming webinar and join host Zach Bellhy, Sage X3 specialist, to learn more and get expert insights on how the Preventive Maintenance Module can help you keep your operations running like a well-oiled machine. Webinar Details: Title – Maximize Uptime: Real-Time Asset Management for Manufacturers Date – Monday, June 30th, 2025 Time – 11am PT / 2pm ET Length – Expected to last about 45 minutes   Click here to register

On the surface, extending credit to customers is a no-brainer since it can be a great way to attract customers and build profitable, long-term relationships with them. But there is more to it than that. Offering credit to a customer, especially a new customer, is not something to jump into in your haste to close a deal. Here’s why: DSO fluctuates with revenue and other short-term changes. Because of its tendency to fluctuate, analyzing DSO over a period of less than a year can be misleading. DSO takes into account only credit sales, not cash sales. Always look at your DSO in context with your company’s terms. As the above statistics show, there is a certain risk that you won’t get paid on time if you extend credit. This can cause trouble with cash flow and hinder your ability to meet the organization’s financial obligations. Before jumping into an agreement, consider the pros and cons of extending credit to customers. Benefits of Extending Credit to Customers While there are risks, there are several clear benefits to offering credit to your customers, including: Establishing Trust with Customers A company that offers credit is reliable, stable, trustworthy, and mature; all of which are comforts to a potential customer. Increasing Customer Loyalty Trusting your customers and offering them credit is a great way to tell them how important their business is to you and how much you appreciate it. They’re helping you bolster your business, so you are providing them with the option for credit so they can be flexible with their own cash flow without scrimping on what they need. By offering credit you have made them feel as though your relationship with them is less about supply and demand and more about trust, an essential part of the modern buyer’s vendor selection. Enhance Your Company Reputation Extending credit is not something every business can afford. By doing so, you’re telling customers and competitors that you’re financially healthy with cash and access to working capital. This will boost your organization’s reputation and your product among buyers and throughout your industry. Gaining a Competitive Edge Not all businesses extend credit, so just by making this a possibility for your customers you are giving yourself an edge. Customers like to buy on credit because it gives them more control over when they pay and gives them more flexibility and control over their cash flow. If they are between two vendors, they’re very likely to be more attracted to the vendor who gives them this flexibility. Increasing Sales For all of the reasons above, offering customers credit will help you attract more prospects and close more deals. Often times, customers are less concerned with the price when they know they can buy now and pay later. With longer payment terms and more buying power, your customers have everything they need to purchase more from you. Additionally, the relationship you will establish with them in the process will further enhance their willingness to buy and even spread the word about your company to their peers. Disadvantages of Extending Credit to Customers All of these benefits of extending credit to customers seem attractive – and they are. But there are some risks to extending credit that all businesses should be aware of: Late-paying Customers Most of your customers who buy on credit will be great customers who pay you on time, but there could be a few rotten eggs that bring trouble in the form of late or delinquent payments. Impact on Cash Flow When you ask customers to pay upfront, you know exactly what your income is every month, but when you sell on credit, things get a little more complicated. As we mentioned above, most customers will pay you on time, some may be a little late, and some may become serious problems; all of this will affect cash flow, perhaps positively, but the chance for a negative impact is possible as well Collection Fees If you have to turn an invoice over to a collection agency or get a lawyer involved due to lack of payment, you won’t collect everything you’re owed. This combats the purpose of extending credit in the first place, but it’s only a real problem if numerous invoices require a collection agency or legal action. A well-written and regularly reviewed credit policy can help you avoid this issue entirely. Focus on Accounts Receivable Management If you start selling on credit, you will need to prioritize accounts receivable management. A/R management is much more than simply sending invoices and recording payments; it takes a lot of time and energy to do it right and avoid bad-debt write-offs, invoice disputes, and late fees. You may even feel you need to hire another employee to keep up with it all. This is not always the case; you can implement plenty of tactics, tools, and simple process adjustments to help you quickly collect invoices without hiring additional hands or letting money slip through the cracks. In Conclusion Don’t run away scared from extending credit quite yet. While there are some significant disadvantages, there are simple ways to manage the risks of extending credit to your customers. You can make smarter choices about credit sales by running credit checks, requiring new customers to fill out credit applications, developing a credit policy, and utilizing accounts receivable management best practices and tools to help make cash flow statements quick and effective. Note: Content for this blog post was originally posted on Sage.com by Yassir Malik, June 3, 2025.

Walid Abu-Hadba, Chief Product and Development Officer at Sage, discusses how the Sage Platform is reshaping the future for customers and partners. As Sage continues to rapidly expand its AI-powered solutions, we sat down with Walid Abu-Hadba, chief product and development officer, to discuss how the Sage Platform is driving faster innovation, transforming productivity, and reshaping the future for Sage customers and partners. In a world where innovation moves at incredible speed, Walid believes Sage is setting the pace. “Businesses can’t afford delays,” he explains. “They need technology that delivers immediate value, streamlining operations, automating tasks, and enabling smarter decisions. But just as important as speed is trust. “Our customers need to know the solutions we deliver are secure, reliable, and built to last. That’s why we’ve invested significantly in the Sage Platform, enabling us to deliver products to market up to 30% faster and more securely than our industry counterparts.” The Sage Platform serves as a powerful foundation for connectivity, enabling rapid integration of AI innovations like Sage Copilot across multiple Sage products. Rather than building solutions from scratch each time, the platform provides a consistent, reusable framework that allows quicker deployment and faster iteration. “Our platform fundamentally changes how we innovate,” Walid highlights. “It allows us to rapidly connect new AI capabilities to multiple products simultaneously, significantly speeding up the overall innovation cycle, while ensuring every update meets the high standards our customers expect and trust.” Unlocking Growth with AI Innovation At the forefront of this AI-driven approach is Sage Copilot, which is available to over 40,000 SMBs and accountants across key markets including the UK, US, France, Spain, and Germany. Sage Copilot automates routine accounting tasks and delivers actionable insights, empowering businesses to make smarter, faster decisions. “Sage Copilot is transformative,” Walid says. “It removes routine tasks, freeing businesses to focus on strategic initiatives that drive sustainable growth.” Security and compliance are fundamental to the design of the Sage Platform, incorporating robust safeguards at multiple levels including data handling, APIs, and AI models. “Security is central to everything we do,” Walid stresses. “We’ve embedded guardrails directly into our platform, ensuring data protection and compliance while allowing innovation to thrive without compromise.” Flexibility is another strength of the Sage Platform. Its cloud-agnostic nature enables swift adaptation to changing industry dynamics and evolving customer needs, ensuring Sage continues to deliver innovation at the pace demanded by businesses. As more organizations join the platform’s digital ecosystem, Sage Network, they collectively benefit from increased accuracy, quicker cash flow, and streamlined compliance. From Concept to Code The Sage Platform isn’t just helping customers innovate, it’s transforming how Sage builds and delivers its own solutions. At the core of this shift is Sage’s AI infrastructure, which has dramatically increased internal developer productivity and shortened product development cycles. “We’ve built an environment where developers can work smarter and faster, using shared tools, frameworks, and built-in guardrails to focus on delivering innovation,” Walid explains. “It’s a repeatable system that accelerates time-to-market without sacrificing quality, security or compliance.” This approach has also unlocked new ways to attract and retain top tech talent. “Our approach to AI has become a major draw for developers,” Walid notes. “As a result, we are closing roles faster than ever before.” Sage’s quarterly AI hackathons are another key component of this internal acceleration. Sage’s teams regularly experiment with new ideas in safe, fast-moving environments designed to promote learning and rapid prototyping. “These events are changing how our teams engage with technology,” Walid says. “They’re not just about innovation, they’re helping us scale up faster, onboard quicker, and build smarter.” This investment has helped transform Sage developers into AI developers, without the need for extensive retraining, enabling faster innovation cycles and more consistent product delivery. “We’re innovating at the speed our customers require because we’ve built a platform that makes it possible,” Walid concludes. “That’s how we stay ahead, and how we help our customers and partners thrive.” Looking Ahead Walid sees even greater opportunity on the horizon. With the Sage Platform as its foundation, Sage is well-positioned to accelerate the delivery of AI-powered solutions, expand its connected ecosystem, and help businesses scale for the future. As innovation continues to reshape industries, Sage is helping businesses not only meet the demands of today, but also adapt and grow in the long term. “What we’re building with the Sage Platform goes beyond generative AI,” Walid adds. “Sage Copilot is just the beginning. We’re already exploring Agentic AI, where intelligent agents will work across systems to complete tasks more proactively. It’s early days, but this is where things are heading, and the platform is designed to support that future.” This evolution reflects Sage’s long-term vision: building technology that simplifies complexity, removes repetitive admin, and empowers users to act with greater clarity and confidence, wherever they work. As AI capabilities evolve, Sage is enabling the next wave of innovation, moving from task assistance to workflow automation and towards intelligent agents that can act proactively across systems. By embedding AI deeper into workflows, the Sage Platform is laying the groundwork for a future where businesses don’t just react faster, they operate smarter by default. “Our mission is clear,” Walid concludes. “We’ll keep innovating at the speed our customers require, helping them stay ahead, thrive, and achieve lasting success.” This blog was written by Asavin Wattanajantra Sage and published on their website on 5/28/25.

Understand the key differences between cash flow vs profit, why both are vital for business success, and how you can optimize financial planning with automation. What is profit? Profit (net income) is what remains after subtracting expenses from revenue over a set period. These expenses typically include the cost of goods sold, operating expenses (such as rent and salaries), marketing costs, taxes, and other overheads. In simpler terms, profit indicates how much money your business earns after costs. Revenue (Income) – Expenses = Profit While profitability is essential, it doesn’t indicate the real-time cash health of your business. Types of profit Gross profit: how much money is left after subtracting only the cost of goods sold (COGS) from total revenue. Shows you the profitability of your core business operations before overhead and other expenses. Operating profit (EBITDA): gross profit minus operating expenses like rent, payroll, and utilities. EBITDA helps you understand the earnings from your ongoing business activities before accounting for taxes and interest. Net profit: the final bottom line after taxes, interest, and all financial obligations. What is cash flow? Cash flow refers to the net change in your business’s cash position over a specific timeframe and it measures how much cash is coming in compared to how much is going out. Negative cash flow indicates that your business is spending more cash than it’s earning during a period, which can limit flexibility and potentially lead to solvency issues. Positive cash flow means your business receives more money than it’s paying out. Types of cash flow Operating cash flow: money generated from core business activities (e.g., sales, wages, and rent). Investing cash flow: cash from buying or selling assets like property or equipment. Financing cash flow: loans, investor funding, and dividends. Cash flow vs profit: why it matters Profit reflects long-term financial performance but doesn’t track real-time cash movement. Cash flow ensures your business can meet short-term obligations. Managing both profit and cash flow is essential for financial stability. Here’s a clear breakdown of the key differences: Key differences Profit Cash flow Timing Recorded when revenue is earned (not necessarily received) and expenses are incurred (not necessarily paid). Tracks actual cash inflows and outflows, regardless of when formally recognized in accounting books. Non-cash items Includes non-cash expenses (e.g., depreciation, amortization), lowering taxable income without affecting actual cash. Excludes non-cash entries; only tracks real cash movements. Measurement Indicates overall business performance and long-term viability. Reflects immediate financial health and liquidity, crucial for covering short-term obligations. Decision-making Guides long-term growth and strategic planning. Essential for daily operational decisions like paying suppliers, meeting payroll, or handling unexpected costs.   A typical cash flow vs profit dilemma A significant contract boosts your projected profit, but net 90 terms delay payments, potentially creating a cash flow crisis. Excitement over profit projections Your business celebrates the anticipated revenue spike, believing you’re on track for record profits. A resulting cash flow crunch Despite strong profit forecasts, payments won’t arrive for three months. Meanwhile, payroll, rent, and production costs still need to be covered, leading to a cash shortfall. Emergency financing To keep operations running, you rely on short-term financing like credit lines or invoice factoring—incurring extra costs that eat into profits. Long-term impact If not properly managed, these higher financing costs and cash flow strain could weaken credit, hurt supplier relationships, and threaten business stability. Practical strategies for managing both cash flow and profit   Cash flow strategy Profit strategy Accurate forecasting Projecting incoming and outgoing cash allows you to anticipate potential shortfalls and secure financing if needed. Estimating future sales, costs, and expenses helps you plan for expansions, hires, or new product lines. Efficient billing and collections Streamline your invoicing process and offer multiple payment methods to encourage on-time payments. Implement clear credit terms and late fees to reduce the risk of overdue invoices. Expense management Keep a close eye on overhead expenses like rent, utilities, and office equipment. Even small monthly costs can snowball if left unchecked. Negotiate better terms with suppliers or vendors to reduce overall spending. Use financing wisely Short-term loans or lines of credit can fill temporary cash flow gaps. Longer-term loans can finance expansions but reduce profitability if interest costs are too high. Reinvest profits strategically Allocate funds toward activities that improve cash flow, such as upgrading systems that accelerate billing cycles or automating administrative tasks. Invest in growth areas like new product development or market expansion to maximize long-term profitability. Maintain a Cash Reserve Keep a cash buffer for emergencies or unexpected expenses. It offers peace of mind and protects against temporary downturns. Ensuring financial stability supports sustained profitability and business resilience.   The relationship between cash flow, profit, and revenue Many people wonder about cash flow vs revenue vs profit because “revenue” is another metric of a company’s financial health. Here’s a quick breakdown: Term Definition Example Revenue The total income from sales or services before any expenses. You sell $100,000 worth of products in a month. Profit The leftover funds once all expenses are subtracted from revenue. After subtracting costs (e.g., $70,000 total expenses), your net profit could be $30,000 on the income statement. Cash flow The real movement of money in and out of the business. If some customers haven’t paid their invoices yet (say, $20,000 is still outstanding), or you had to make early payments to suppliers, your net cash flow might only be $10,000 in the same period.   This discrepancy demonstrates why you can have a “profitable” business that struggles with cash shortages. Typical cash flow and profit pitfalls (and how to avoid them) Overestimating sales projections Unrealistic revenue forecasts can lead to cash shortfalls. Use conservative forecasting with best- and worst-case scenarios. Track key indicators (e.g., website traffic, inquiries) and adjust real-time forecasts. Ignoring seasonal variations Fluctuating demand can leave you short on cash in slow periods. Analyze past cash flow trends and build a reserve fund. Adjust expenses, i.e. scale staffing, marketing, and inventory to match seasonal demand. Focusing on profit, not liquidity A profitable business can struggle if your revenue is tied up in unpaid invoices. Improve receivables management—set clear payment terms and follow up on invoices. Shorten the cash conversion cycle and use forecasting tools to anticipate shortfalls. Misusing debt Poorly managed debt can drain cash flow with high-interest payments. Match debt to revenue streams—long-term investment loans and short-term financing for working capital. Monitor debt ratios and explore flexible financing options like revenue-based funding. Addressing these pitfalls ensures strong cash flow, financial stability, and long-term profitability. Why manual profit and cash flow tracking can hold your business back Tracking profit and cash flow manually—using spreadsheets, outdated accounting methods, or disconnected financial tools—creates significant risks that can harm the stability of your business. 1. Delayed financial insights lead to poor decisions If you’re manually tracking profit and cash flow, you may rely on historical data that may be outdated. You’ll have to make significant financial decisions (hiring, expansion, capital investments) based on stale reports, increasing risk. Example: your company expands after seeing substantial profit numbers last quarter—only to face a cash flow crisis because invoices remain unpaid. 2. Human error leads to inaccurate reporting Manual spreadsheets are prone to mistakes in data entry, formulas, and misclassifications, which distort financial health insights. You risk overestimating revenue, underestimating costs, and failing to account for financial leakage. Example: your company manually tracks cash flow, miscalculates a supplier payment due next month, and faces an unexpected cash shortfall. 3. Disconnected data makes tracking inefficient Finance teams often juggle multiple software tools, spreadsheets, and bank statements, none integrating seamlessly. Without a central financial management system, you waste time manually consolidating reports. Example: you spend hours pulling data from different systems to calculate your cash position rather than getting real-time insights. 4. No real-time visibility into risks or opportunities Manually tracking financials prevents proactive decision-making. You can’t detect cash flow gaps, margin erosion, or cost inefficiencies until too late. Example: you fail to notice that rising material costs are eating into profits—because the data wasn’t analyzed in real-time. How AI and automation can help track profit and cash flow Today, you can use cloud-based financial management tools that make use of AI and automation to provide: 1. AI-powered profit and cash flow forecasting AI can analyze past financial data, identify trends, and more accurately predict future profit and cash flow cycles. AI can forecast cash flow shortfalls before they happen, allowing you to adjust spending or secure financing in advance. Machine learning models detect profit margin changes and automatically flag cost inefficiencies. Example: AI-powered forecasting alerts you three months ahead of a potential cash flow crunch—allowing time for adjustments. 2. Automated financial reporting & reconciliation Cloud-based financial management tools automatically sync revenue, expenses, invoices, and payments in real-time. Instead of manually reconciling cash flow, you can use automated accounting software to generate real-time financial statements. AI identifies missing or duplicate transactions, preventing accounting errors. Example: AI-driven reconciliation tools match bank transactions automatically, reducing month-end closing times from weeks to days. 3. Integrated AI analytics for smarter decision-making AI can analyze financial data across product lines, geographies, and cost centers, giving detailed, real-time profitability insights. AI-powered dashboards can help you see which areas drive profitability and drain cash flow. AI can suggest cost-cutting opportunities and pricing adjustments based on real-time profit margin analysis. Example: your financial management software spots that a high-revenue product line has shrinking margins—so you adjust pricing before losses escalate. 4. AI-powered accounts payable automation AI speeds up invoice collection and optimizes payment timing to prevent cash flow issues. Automated invoicing ensures faster payments by sending reminders and processing transactions seamlessly. AI-driven cash flow management analyzes supplier payment schedules, ensuring optimal timing to maintain your liquidity. Example: you automate supplier payments, improving cash flow efficiency by reducing late fees and maximizing early payment discounts. Final thoughts Profit drives long-term growth, while cash flow keeps a business running day to day. Ignoring either can lead to financial trouble, forcing you into reactionary decision-making rather than proactive financial planning. Balancing cash flow and profit with intelligent financial technology can give you the agility to make smarter, data-driven decisions. Thereby ensuring that your business is financially resilient enough to unlock new opportunities and drive sustainable success. Note: Content for this blog post was originally posted on Sage.com by Asavin Wattanajantra, April 4, 2025.

This blog explains how Sage X3 users can handle current and future tariffs within the system without requiring modifications or third-party solutions. If the standard options don’t fully meet your needs for capturing tariff-related details, a custom solution or the Net at Work Surcharge Module (covered at the end of this blog) may be a better fit. Purchasing Tariffs Design Landed Cost with Complimentary Invoice Solution Part 1: Supplier Cost Structure Setting a product supplier cost structure with a cost type tariff in % to accrue at receipt. GL Breakdown: GL Account Debit Credit Inventory 115 RNI 100 Tariff (Landed Cost) Accrual 15   Now you can see the value of the tariff on the PO: Below you can see the value of the tariff on the Receipt: On both the PO and Receipt, you can view the cost details per line: You can update the PO (before receipt) or receipt while receiving or after creation to change the value of the tariff by using the line’s “cost structure detail” to impact the accrual. Especially useful if the tariff has been canceled: The receipt is valued including the tariff: Part 2: Using Complimentary Invoices to offset the accrual from the custom broker invoice. At creation of the complimentary invoice, select the line action menu “Pre-loading the line”: Enter the amount of the invoice. It can be higher or lower than the initial accrual Uncheck “New cost” Select the tariff cost Use the left panel’s “Receipt selection”, to select line on which the tariff applies: GL Breakdown: GL Account Debit Credit Tariff (Landed Cost) 15 AP 15   Note: Any variances from the amount accrued at time of receipt will automatically be reclassed from the accrual account to inventory or variance. Pros of using Sage X3’s native functionality for tariff management: Out of the box configuration, no modifications are needed. Limited setup and training (especially on complimentary invoices to offset the accrued cost, which is slightly different from what clients are used to doing with a new cost). Receipt accrual should be low variance for tariffs, as tariff rates are supposed to last several months. Easy to update if there are changes in tariffs. You can see the details on the PO and receipt “costs” tabs. If a product is sourced from multiple suppliers from different countries subject to different tariffs, you can easily set a different percentage per supplier-product combination. Con of using Sage X3’s native functionality for tariff management: Out of the box functionality does not allow different landed cost types to have separate GL accounts. The landed cost account is designated on the product accounting code shown on line 73 in the image below.   Part 3: Sales Tariff Design Below are four distinct solutions available depending on how you choose to apply tariffs. 1.     Invoice Element Solution – Create an invoice element to add % to each invoice. Pros of this method: Straight forward. Out of the box configuration, no modification required. Can break out the value of the tariff on the invoice without giving too much information line by line. Allows break out in the GL. Can easily change percentage on a transaction-by-transaction basis. Cons of this method: Broad calculation based on the entire invoice of the order and not product specific. 2.     Price List Solution (Gross Price) – Increase your price list for the gross price calculation or create a tariff price list in percentage form for discount and charge to increase the net price. Pros of this method: Straight forward. Out of the box configuration, no modification required. Cons of this method: It can be tedious to identify which product is subject to what increase. If you don’t have Net at Work’s Price List Module, the update may be tedious. No detail for your customer. Everything is merged into gross prices if you increase your gross price. Workaround for this – A separate price list for tariff charges can keep details. 3.     Base Price Solution – Using the base price as the gross price in order to increase it by a tariff based on the last cost. For example – Change the price list setup with a price processing set as the calculation: [[F:ITM]BASPRI+0.15*[F:ITV]LASRCPPRI for a base price + 15% on last receipt cost. Pros of this method: Straight forward. Out of the box, no modification required. Cons of this method: Limited application to clients that use based price as their gross price. No detail for the client’s customer, everything is merged into the gross price. Once your last receipt cost is incremented by a tariff, it doubles down on the mark up. Charge / Discount Solution (based on the last cost) Create a Charge / Discount dedicated price list based on the last purchase cost. Update the price structure for an “adder” as Tariff and link to an invoicing element. Create a price list with no price value, just the tariff charge set to “yes.” This can apply to everything, including specific products and statistical groups for example.   Next, export your products subject to tariff with their last receipt cost. Add a column, in Excel, to calculate the value of the tariff, for example apply 15% on the last receipt cost, it could be different % per product if they are from different origins. Import the price list with the product and that new column for the Tariff. Tariff amount will be calculated based on price list and display at the sales invoice/order line level. It will also be posted back to the invoice element and a separate GL account. Pros of this method: Relatively easy to implement. Basing the tariff on the cost. Can break out the value of the tariff on the invoice without giving too much information line by line. However, if you want the detail at the line level, then the structure can be changed so it is not linked to an invoicing element. Cons of this method: It’s not dynamic. But this prevents future receipt prices from including the tariff. The export, calculation and import to a price list can be cumbersome for some. If you have manufactured products, the calculation of the tariff cost might be especially complex. Have components from multiple sources with different tariffs. 5.     Charge / Discount Solution (% of Sales Price) Create a Charge / Discount dedicated price list based on percentage of sales price. Update the price structure for an “adder” as Tariff and link to an invoicing element. Create a price list with no price value, just the tariff charge set to “yes.” This can apply to everything, specific products or by statistical groups for example. The tariff percentage will be calculated based on a price list and display at the sales invoice/order line level but will be posted back to the invoice element and a separate GL account. Pros of this method: Easy to implement. Out of the box configuration. No modification required. Can break out the value of the tariff on the invoice at header level but also provide line level information as needed. Allows break out in the GL. Price list flexibility allows you to pick which products will have the tariff applied. Can quickly modify percentages as they change. Cons of this method: Assuming products requiring the tariff are easily identified by product fields such as category or statistical codes. Important to note: For solutions where the tariff uses invoice elements, changes to the invoice crystal report may be necessary to properly show the invoice element. Part 4 – Net at Work’s Solution Net at Work has developed a Product Surcharge module that has multiple applications capable of handling tariff configuration. The module is required when: You need to expand the cost structure beyond the maximum nine discounts and charges allowed when utilizing Sage alone. You require or prefer a detailed breakout in the GL by surcharge as opposed to one landed-cost accrual account. Benefits of the NAW Product Surcharge Module include: Automated Surcharge Calculation: The module automates the calculation of surcharges based on predefined rules, reducing manual errors and saving time. Flexibility in Pricing: It allows for flexible pricing adjustments, including percentage-based surcharges and fixed amounts, ensuring accurate cost management. Enhanced Revenue Management: By incorporating surcharges, businesses can better manage revenue streams and account for fluctuating costs, such as commodity price changes. Supplier and Customer Alignment: The module supports different surcharge rates for suppliers and customers, providing a cushion for price fluctuations and ensuring profitability. Exception Rules: The module supports defining exceptions to standard surcharge rules, allowing flexibility in handling different tariff scenarios. Comprehensive Reporting: Detailed reporting features help track surcharge applications and their impact on overall pricing and profitability. Conclusion We hope this week’s Sage X3 Insider Blog was informative and helpful for those of you managing tariffs in Sage X3. If you have any questions or want to learn more about Net at Work’s Product Surcharge Module, please don’t hesitate to contact us. We’re always here to help.

Stay Focused on Your Business. We’ll Handle System Performance Ensure your system remains secure, stable, and optimized with Net at Work’s CTXP for Sage X3. Our proactive approach helps prevent issues before they arise, keeping your business running efficiently and securely. Monthly Technical Reviews Stay ahead of potential risks with a proactive assessment of your system’s health. Our monthly technical reviews provide: Actionable Insights – A structured report outlining areas that require attention before the next review. Completion Notification – An email confirmation detailing the process and next steps. Quarterly Preventative Health Check A comprehensive deep-dive into your system’s performance, security, and overall health to help ensure it continues to run efficiently. Comprehensive Report – Insights from past reviews, performance metrics, and key findings. Expert Recommendations – Tailored guidance on optimizations, security enhancements, and best practices. Strategic Review Meeting – A dedicated session with our ERP specialists to discuss findings and align strategies with business goals. Sage X3 License and SSL Certificate Update We proactively manage your Sage X3 licenses and SSL certificates to maintain system functionality, security, and compliance. Helping to minimize disruptions and protecting your business from potential risks. License Renewal & Validation – Acquisition and installation of Sage X3 license keys to ensure uninterrupted access. SSL Certificate Renewal & Installation – Securing encrypted connections to protect sensitive data. System Compatibility Check – Pre-update verification to prevent conflicts and ensure seamless transitions. Testing & Validation – Post-update checks to confirm successful licensing and security configurations. Completion Notification – A confirmation of updates performed. Folder Refreshes Maintain an accurate, up-to-date test environment with two folder refreshes included per year and more available upon request. This allows your team to safely test new configurations, troubleshoot issues, and validate changes before deployment. Thereby reducing risk and ensuring smooth upgrades. Full Endpoint Replication – A secure and accurate copy of your production endpoint is transferred to the test environment, ensuring data integrity and consistency. Environment Configuration – Adjustments to database connections, system parameters, and integrations to align with test environment requirements. Validation & Integrity Checks – Post-copy verification to ensure data accuracy, proper system functionality, and alignment with expected configurations. Completion Notification – A notification of refresh performed. CTXP Features & Schedule Proactive Maintenance. Expert Support. Total Peace of Mind. With Net at Work’s CTXP for Sage X3, you benefit from ongoing system optimization, preventative maintenance, and expert guidance. Experiencing total peace of mind as a result. Ready to Get Started? Leave the complexity, security risks, and budget constraints of constant maintenance to Net at Work. Whether you’re looking to reduce costs or improve security, the CTXP Plan for Sage X3 is the obvious choice. Contact us today.

A looming U.S.-Canada trade war came into force on March 4, 2025, when the United States imposed additional tariffs on Canadian imports. Canada responded immediately with retaliatory tariffs on a host of U.S. products and promised more tariffs would follow unless the U.S. removes its supplementary tariffs. Many policymakers on both sides of the border oppose the tariffs and hope they won’t last. In the meantime, Canada is taking a hard line in response to the U.S. tariffs on Canadian goods. A lot has happened since March 4. Here’s what we know today. U.S. Tariffs on Canadian Goods President Donald J. Trump first announced new tariffs on Canada, Mexico, and China on January 31, 2025. Since then, U.S.-Canada tariffs have been announced, delayed, implemented, paused, changed (and repeat). For affected businesses, this has a tremendous impact on compliance. The U.S. imposed additional duty rates on “goods that are the product of Canada entered for consumption, or withdrawn from warehouse for consumption,” on or after 12:01 a.m. ET on March 4, 2025. Per U.S. Customs and Border Protection (CBP) guidance, the new tariffs affect the following Harmonized Tariff Schedule of the United States classifications (HTSUS codes, or simply HTS codes): 01.10: A 25% additional ad valorem rate of duty on all imports of articles that are products of Canada except: Products classifiable under headings 9903.01.11, 9903.01.12, and 9903.01.13 Products for personal use in accompanied baggage of persons arriving in the U.S. 01.13: A 10% additional ad valorem rate of duty on imports of energy or energy resources of Canada, as defined in section 8 of Executive Order 14156 as crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, the kinetic movement of flowing water, and certain critical minerals Additional guidance is available in CSMS # 64384496, CSMS # 64384423, and CSMS # 64375535. On March 5, President Trump paused the tariffs on automobiles from Canada and Mexico after meeting with the big three auto dealers (Stellantis, Ford, and General Motors). “There is a one-month exemption on any autos coming through USMCA,” said White House Press Secretary Karoline Leavitt, adding that reciprocal tariffs would still go into effect on April 2, 2025. On March 6, the president paused the tariffs for Canadian products covered under the United States-Mexico-Canada Agreement (USMCA). He also lowered the additional tariff on potash from 25% to 10%. His executive order gives March 7 at 12:01 a.m. ET as the effective date of the exemption, but no expiration date. See guidance from CBP for more details. President Trump made a similar announcement for Mexico on March 5. According to a White House official, the exemptions apply to approximately 50% of Mexican imports and 38% of Canadian imports; those numbers have been disputed. With tensions mounting, Trump said on March 7 that the U.S. could soon impose reciprocal tariffs on Canadian dairy and lumber products. “We may do it as early as today, or we’ll wait till Monday or Tuesday,” he said from the Oval Office. What is a “Product of Canada”? A “product of Canada” means at least 98% of the total direct costs of producing or manufacturing the item were incurred in Canada, and “the last substantial transformation of the good occurred in Canada,” according to the Government of Canada. “Made in Canada” means between 51% and 98% of the total direct costs occurred in Canada, and the last substantial transformation of the good occurred in Canada. The “Made in Canada” label should be accompanied by an appropriate qualifying statement, such as “Made in Canada with imported parts.” What are Canada’s Retaliatory Tariffs? Canada immediately imposed 25% tariffs on $30 billion CAD in goods as of 12:01 a.m. ET, March 4, 2025. However, these new tariffs do not apply to U.S. goods that were in transit to Canada on March 4. The Canadian government did not pause the retaliatory tariffs on March 6, when President Trump postponed many of the tariffs on Canada. Canada’s new tariffs apply to goods imported for commercial and personal purposes, even when exported from a country other than the U.S. In other words, affected goods originating in the U.S. are subject to the tariff even if shipped from another country. Proof of origin must be submitted for all imported goods, barring certain exceptions. For this first wave of tariffs, affected products include apparel and footwear, appliances, beer, coffee, cosmetics, orange juice, peanut butter, motorcycles, spirits, wine, and certain pulp and paper products. The additional 25% tariff does not apply to goods classified under Chapter 98 of the Schedule to the Customs Tariff, except tariff items 9804.30, 98.25, 98.26, 9897.00.00, 9898.00.00 and 9899.00.00. According to the Government of Canada, the additional 25% tariffs will remain in place until the U.S. eliminates its tariffs on sales of Canadian goods. Speaking on March 6, Prime Minister Justin Trudeau said Canada will stand firm until the U.S. eliminates the new tariffs on Canadian goods. More Retaliatory Tariffs Could Follow On March 4, Canada said it was preparing to impose further tariffs in 21 days, should the U.S. continue to apply its tariffs on Canadian imports. On March 6, Finance Minister Dominic LeBlanc announced that Canada would not proceed with the second wave of tariffs until April 2, “while we continue to work for the removal of all tariffs.” A second round of tariffs would affect another $125 billion CAD worth of products, including: Beef and pork Dairy Fruits and vegetables Electric vehicles Electronics Steel and aluminum Trucks and buses See the Department of Finance Canada for a list of Harmonized System (HS) codes that could be affected by additional tariffs. How Canadian Provinces Are Responding to U.S. Tariffs Canadian provinces are responding with force. Provincial measures against the U.S. trade policies include canceling contracts with U.S. businesses, pulling U.S. products from shelves, raising tolls on U.S. vehicles, and even new export taxes. U.S. products have been pulled from shelves in Alberta, Manitoba, New Brunswick, Newfoundland and Labrador, Nova Scotia, Ontario, Quebec, and Prince Edward Island. This hits more than 3,600 American-made alcohol products hard. British Columbia is targeting red-state liquor products, specifically, which will result in a $40 million a year loss for manufacturers in those states, according to the B.C. government. B.C. is “prepared to take additional action,” on top of removing liquor from red states, “if needed.” On March 6, Premier David Eby said B.C. may impose tolls on U.S. truck traffic traveling from the continental United States to Alaska. Alberta Premier Danielle Smith called the Trump tariffs “an unjustifiable economic attack on Canadians and Albertans” as well as “a clear breach of the trade agreement signed by this same U.S. President during his first term.” On March 5, she said Alberta fully supports Canada’s federal response and will no longer purchase American alcohol or video lottery terminals. But Alberta won’t reduce exports of oil and gas or impose new export taxes on those products. In Manitoba, businesses adversely affected by the tariffs will be able to defer payments of the provincial sales tax and the health and post-secondary education tax. Premier Wabanakwut Kinew is also considering cutting exports of hydroelectricity and preventing U.S. companies from bidding on Manitoba government contracts. New Brunswick will sign no new contracts with American companies and is seeking new markets for items traditionally exported to the U.S., such as lumber and seafood. On March 4, Premier Susan Holt told CTV News her province has been preparing for Trump’s tariffs for months. “The president might not realize that we supply American defense with jet fuel,” she said. “If you go to the base in Maine … those planes don’t get in the air without Canadian jet fuel.” The Government of Newfoundland and Labrador is looking for new markets for local businesses and encouraging residents to avoid purchasing American products. Nova Scotia has doubled tolls for U.S. commercial vehicles at the Cobequid Pass and limited provincial procurement for American businesses (they can no longer bid on provincial businesses). It may cancel existing contracts. Doug Ford, the Premier of Ontario, isn’t pulling any punches. He told reporters he’ll “do everything — including cut off their energy with a smile on my face,” in response to the U.S. tariffs. “They rely on our energy; they need to feel the pain. They want to come at us hard, we’re going to come back twice as hard.” On the evening of March 6, Ford said Ontario would impose provincial tariffs on electricity delivered to Michigan, Minnesota, and New York, which are the three biggest customers for Ontario power. The 25% surcharge was set to take effect March 10. On March 11, Premier Ford and U.S. Secretary of Commerce Howard Lutnick issued a joint statement on X: Ford agreed to suspend Ontario’s 25% tariff on electricity; Lutnick agreed to officially meet with Ford in Washington on March 13. The U.S. also agreed to not add the extra 25% tariff on steel and aluminum imports that President Trump announced on March 11. Had it taken effect, the U.S. tariff on steel and aluminum imports would have been a whopping 50%. The original 25% tariffs on steel and aluminum remain in effect. Prince Edward Island is reviewing all American government contracts. Quebec announced a 25% penalty for American firms bidding on Quebec government contracts. Like Ontario Premier Doug Ford, Premier François Legault is considering shutting down power exports to the U.S. In a Facebook statement, Saskatchewan Premier Scott Moe said, “Canada’s response needs to be economically sound and reasoned,” and that his cabinet would “consider all options.” On March 6, Saskatchewan said it would stop purchasing U.S.-produced alcohol and would reduce purchases of other U.S. purchases and contracts. Are the Tariffs Stackable? Yes. One product may be subject to multiple tariffs, including a standard rate of duty, an additional duty, and a punitive duty. Under the substantial transformation test, a product imported from Canada could be subject to a 25% Canada tariff as well as a 20% China tariff and/or another tariff. USMCA and the New Tariffs Many products traded between the U.S., Canada, and Mexico have been free from tariffs under the United States-Mexico-Canada Agreement (USMCA), or subject to a low rate of duty. President Trump spearheaded USMCA during his first term in office after ending the North American Free Trade Agreement (NAFTA). “The USMCA is the largest, most significant, modern, and balanced trade agreement in history,” Trump said when signing the USMCA in January 2020. “All of our countries will benefit greatly.” Congress isn’t scheduled to conduct a formal review of the USMCA until July 2026. According to a document published by the Congressional Research Service in December 2024, a key point will be to determine whether to extend the pact. Goods that previously qualified for a reduction of normally applicable import duties under USMCA were subject to additional tariffs from 12:01 a.m. ET on March 4, through 12:01 a.m. ET on March 7, when the tariffs were paused. Tariffs paid during that brief window won’t be refunded. Guidance published by the Canadian Government notes that Canada’s Duties Relief Program and Drawback Program are available for surtax paid or payable, subject to the provisions of the Canada-United States-Mexico Agreement (CUSMA). Global Reaction to U.S. Tariffs Canada isn’t alone in retaliating. Starting March 10, 2025, China will impose tariffs on roughly $21 billion worth of U.S. agricultural products. A 10% tariff will apply to beef, dairy products, fruit, pork, seafood, sorghum, soybeans, and vegetables. A 15% tariff will affect products such as chicken, corn, cotton, and wheat. Mexico said it would announce retaliatory tariffs on U.S. goods on March 9. The European Parliament in February said negotiation would be “the EU’s first likely course of action” should the U.S. raise tariffs on EU goods. Yet European Commission President Ursula von der Leyen said unjustified tariffs on the EU will not go unanswered. Counter tariffs on U.S. goods were mentioned, as was filing a complaint with the World Trade Organization and seeking reparations. On March 11, the European Commission announced a “swift and proportionate response” to the new U.S. tariffs on EU exports. It will automatically reinstate tariffs on a range of U.S. products, including boats, bourbon, and motorcycles, starting April 1, 2025. This isn’t over. Trump imposed 25% tariffs on steel and aluminum imports as of March 12, and he may establish more tariffs on more countries. Furthermore, the de minimis exemption for Canada, Mexico, and China is set to end as soon as CBP can implement the necessary processes. Businesses caught in the crossfire of this new trade war need to be able to comply with new import tax requirements, whatever they are. How Businesses can Ease the Compliance Burden Given the late-breaking nature of the recent tariff changes, automation is key to compliance. Avalara Cross-Border automates tariff code classification and delivers real-time calculation of customs duties and import taxes for our customers. They keep their finger on the pulse of tariff policy changes and update their systems to keep businesses compliant. “Our talented team of content researchers and content engineers work around the clock to ensure the vast array of trade content we deliver to our customers is both timely and accurate,” says Craig Reed, GM of Cross-Border at Avalara. “Despite the dizzying pace of change this past month, our team has been on top of it. Whether it’s restrictions content, tariffs, classification codes, or other trade content, we provide our customers with the tools and services they need to be compliant, all powered by our powerful AI and automation engines.” Contact Avalara today to learn how they can help you stay ahead of tariff changes. For more information about the changing tariff landscape, check out: How to prepare for Trump tariffs How to handle U.S.-China tariffs and the eventual end of de minimis De minimis exemption changes are coming: Is your business ready? Trump steel and aluminum tariffs: What you need to know Note: Content for this blog post was originally posted on Avalara.com by Gail Cole, March 12, 2025.

Are rising costs creating pressure on your cash flow? Knowing how to negotiate better payment terms with your suppliers could be your business’s strategic edge to stay ahead. Rising costs and economic uncertainty are putting pressure on businesses of all sizes, making it more important than ever to manage cash flow effectively. From the increasing prices of raw materials to greater labor and operational expenses, maintaining financial flexibility is crucial for stability and growth. One often overlooked but highly effective strategy to safeguard your business is to negotiate better payment terms with suppliers. By extending payment terms or structuring deadlines that align with your cash flow cycle, you can create breathing room, strengthen your financial position, and navigate uncertainty with greater confidence. This article will explore key negotiation strategies to help you optimize payment terms, improve liquidity, and set your business up for long-term success. Challenges of Rising Costs on Business Operations If you’re in charge of managing your company’s finances, you’ve likely seen firsthand how rising costs are making it harder for businesses across the US to maintain stability and achieve growth. For countless owners, managing these expenses can feel like an uphill battle. Here’s a closer look at five major factors driving these rising costs and how they impact your operations. 1. Inflation Inflation is one of today’s biggest hurdles, driving up the cost of goods and services while squeezing already narrow profit margins—especially for SMEs. According to the US Bureau of Labor Statistics, inflation rates reached historic highs in recent years, with annual increases in the Consumer Price Index (CPI) peaking at over 9% in mid-2022. These rising costs directly impact operational expenses, from raw materials and transportation to utilities and wages. Inflation can severely strain budgets for SMEs, which often lack the financial buffers of larger corporations. Every extra dollar spent on raw materials, transportation, and wages is one less dollar for reinvesting in growth, such as hiring or expanding into new markets. 2. Access to Credit Financing has become more complex, particularly after several regional bank closures in 2023 tightened lending conditions. According to the Federal Reserve’s Seniors Loan Officer Opinion Survey, nearly half of banks reported stricter lending standards for commercial and industrial loans following these closures. Without reliable credit, your business may find it harder to cover day-to-day expenses, let alone invest in growth opportunities. That’s why negotiating better payment terms with your suppliers is more important than ever–it can provide the steady cash flow you need to weather these challenges. 3. Interest Rate Volatility Unpredictable interest rates make planning tough for your business, hindering long-term strategies and major financial commitments. In 2023, the Federal Reserve raised rates to their highest level in over 20 years, peaking at 5.5% in an effort to curb inflation. This move, however, also drove up borrowing costs, putting additional pressure on SMEs that rely on loans to fund operations or growth. To try and counter this, in 2024, the Fed made its first interest rate cut in four years and is considering further cuts, which should ease a bit of pressure on borrowers but by how much is unknown. 4. Hiring and Employee Retention If you’re managing a small business, you’ve likely also felt the pressure of rising wages and benefits as competition for skilled workers heats up. Finding and keeping the right talent isn’t just challenging—it’s getting more expensive. A survey by the National Federation of Independent Business (NFIB) found nearly half of small business owners struggle to fill job openings due to a lack of qualified candidates, driving up recruitment expenses. To stay competitive, SMEs are finding creative ways to stand out—such as offering professional development opportunities. At the same time, managing cash flow effectively—by negotiating better payment terms with suppliers, for instance—can free up the resources you need to invest in hiring and retention strategies. This not only helps your business stay afloat but also positions you for long-term success in a tight labor market. 5. Supply Chain Disruptions and Trade Tariffs Trade tariffs significantly influence supply chain dynamics, often leading to increased costs and operational challenges for businesses. Recent developments, such as the US imposing tariffs of 25% on goods from Canada and Mexico and 10% on Chinese imports, have heightened these challenges. These measures can result in higher prices for raw materials and components, prompting companies to seek alternative suppliers or adjust their sourcing strategies. Such adjustments can lead to delays and increased expenses, further complicating supply chain management. Smaller businesses, lacking the financial resilience of larger corporations, are particularly susceptible to these disruptions. Negotiating favorable payment terms becomes crucial in this context, as it can help stabilize cash flow, mitigate the impact of rising costs, and maintain operational continuity. Managing Cash Flow by Negotiating Payment Terms With inflation, tight credit, fluctuating interest rates, hiring challenges, and supply chain disruptions all impacting your bottom line, managing cash flow effectively has never been more important. One powerful way to stay ahead? Negotiating better payment terms—both with your suppliers and your customers. Payment terms define how and when money changes hands. While smaller orders might call for upfront payment, larger or custom orders can allow greater flexibility—such as installment plans split between a deposit, scheduled payments, and a final balance upon delivery. On the flip side, you can also work with customers to structure payment schedules that align with your revenue needs and help minimize delays. Taking a proactive approach to terms negotiations can boost liquidity, free up working capital, and give your business the financial flexibility to navigate economic uncertainty with confidence. By keeping a clear view of your finances—through tools like a cash flow statement template—you’ll know the best times to send or request payments. A well-planned schedule fosters trust, aligns payment cycles with your cash flow, and even unlocks discounts that improve your bottom line. You can set all these things out in an invoice. Terms on an Invoice to be Aware of When writing an invoice, it’s important to be clear about when and how much needs to be paid. Here are some common payment terms you should keep in mind: Payment in Advance (PIA): payment must be made before goods or services are delivered. Net 7, 10, 15, 30, 60, 90: payment is due within 7, 10, 15, 30, 60, or 90 days from the invoice date. Cash on Delivery (COD): payment is collected at the time of delivery. End of Month (EOM): payment is due at the end of the month in which the invoice is issued. 1MD–2MD: payment is due one or two months after a full month’s worth of goods or services has been delivered. 5/10 Net 30: a 5% discount applies if payment is received within 10 days. Otherwise, the full amount is due within 30 days. 21 MFI (Month Following Invoice): payment must be made by the 21st of the month following the invoice date. Cash Before Shipment (CBS): payment is required upfront, before the creation or delivery of goods. Line of credit: payment may be spread out over time, up to an agreed credit limit. Stage payments: payments are made in installments at set stages of a project or contract. Pay Early or Pay Later? Deciding when to pay depends on your cash flow cycles and supplier relationships. Some suppliers offer discounts for early payments—a worthwhile perk for businesses with enough liquidity. According to research by Atradius, 42% of invoices are paid on time, while 8% are eventually written off as uncollectible. Paying promptly can strengthen supplier relationships and potentially reduce costs. On the other hand, asking for extended payment terms can help you align payments with incoming revenue and maintain financial stability. Balancing these strategies is part of a broader negotiation process—one that can ultimately improve your bottom line and keep both you and your suppliers on good terms. How to Negotiate Payment Terms Negotiating favorable payment terms can strengthen your financial position, help you retain more cash, and reduce reliance on loans or overdrafts—all of which can lead to better partnerships with suppliers and customers. Here are several strategies for getting the best possible arrangements: 1. Tailor your Approach for New Versus Existing Clients Understanding who you’re working with is the foundation of a successful negotiation. Your tactics will naturally differ for new clients and those you’ve served for years: New clients Set clear expectations: agree on payment schedules and terms before starting the work. Offer early payment incentives: provide a small discount or perk to encourage prompt payments. Communicate late fees: establish penalties upfront to discourage delays. Existing clients Listen first: talk through any challenges they face with paying on time. Suggest payment plans: offer installment options or other creative arrangements. Find a win-win: be ready to adjust terms within reason if it means a healthier, long-term relationship. 2. Prioritize your Negotiation Targets Start by focusing on your biggest suppliers first—it’s a smarter and more efficient way to negotiate. Each conversation will give you valuable insights that you can use to refine your approach moving forward. Plus, as you build your priority list, you might discover alternative suppliers offering better terms or pricing, giving you more negotiation options. 3. Define Payment Arrangements Early When collaborating with a new supplier, don’t wait until the last minute to discuss payment schedules, pricing, and delivery details. It’s best to bring these up early to align terms with your cash flow needs rather than just accepting default options. For instance, your businesses might prefer to extend invoices beyond 90 days to manage large expenses better. Bigger companies often have an easier time with payment term extensions, but smaller firms can achieve similar results by highlighting consistent order volumes and reliable payment history. 4. Be Transparent and Build Trust Suppliers want to know the reason behind your request for different terms. Rather than issuing ultimatums, explain how more flexible payment cycles can support continued or increased business. Additional Strategies Include: Promoting their services Share information about your supplier’s offerings within your networks or to potential clients. Committing to future orders Promise a minimum spend or a set number of purchases in exchange for extended terms. 5. Stay Flexible and Aim for Compromise Negotiations often succeed when both sides benefit. If you propose moving from net 30 to net 90 terms, consider settling on net 45 as a happy medium. Finding the balance fosters a collaborative environment and sets the tone for future deals. 6. Do your Research Before negotiating, take the time to understand the standards of your supplier’s industry. For example, North American firms are experiencing an uptick in late payments and bad debt: 55% of B2B invoiced sales are overdue, and around 9% get written off entirely. In the electronics and IT sector, late payments have risen due to liquidity problems and invoice disputes, making suppliers wary of extending lenient terms. With insights into your cash flow needs and the challenges your suppliers face, you’ll be well-prepared to secure payment terms that benefit everyone involved. How to Secure Timely Payments After Negotiating Terms Negotiating better payment terms is a great start but making sure you actually get paid on time is just as important. Here are a few simple ways to keep things running smoothly: Invoice Promptly and Include Key Details Send invoices immediately after you deliver goods or services. Make sure the invoice includes clear payment terms, due dates, and any penalties for late payments. Follow up Quickly on Late Payments Don’t wait to chase overdue payments. A friendly reminder shortly after the due date can often resolve delays without straining the client relationship. Highlight Payment Penalties Reinforce the terms of your agreement by clearly communicating any late payment fees or penalties to encourage timely action. Use Guarantees When Necessary If the client has provided collateral or assets as a backstop guarantee, consider this option a last resort. However, always exhaust other avenues first, as maintaining a positive relationship is crucial for long-term success. Simplify your Payment Process Negotiating payment terms is a strong step toward healthier cash flow but pairing that strategy with the right tools can take it even further. Online invoicing software automates the billing process, ensures on-time payments, and keeps you updated with real-time tracking—so you can quickly follow up on any overdue invoices. Features like automated reminders and multiple payment options (credit card, ACH, PayPal) help customers settle bills faster, reducing late payments and freeing you to focus on growth. By integrating advanced financial tools, you can turn payment challenges into genuine opportunities for lasting success. Final Thoughts In times of economic uncertainty and rising costs, securing more favorable payment terms isn’t just a financial convenience—it’s a strategic necessity. Open communication with your suppliers is key to reaching agreements that benefit both sides. By taking a proactive and strategic approach—through preparation, patience, and transparency—you can secure payment terms that not only improve cash flow but also help your business remain agile and resilient in an unpredictable market. Note: Content for this blog post was originally posted on Sage.com by Yassir Malik, March 12, 2025.