Most corporates believe they negotiate the best price.

Very few realise they are paying a hidden premium — not for quality, not for logistics — but for uncertainty.

Liquidity risk is silently priced into supply chains.

Let me explain with a simple real-world scenario.

Imagine two MSME vendors supplying identical components to two different large corporates.

The only difference?

Vendor A gets paid in 15 days. Vendor B gets paid in 90 days.

That’s it.

Now let’s see what actually happens beneath the surface.

For a small or mid-sized business, 90 days is not “working capital strategy.”

It’s survival stress.

Here’s what Vendor B faces:

So how does Vendor B survive?

They borrow.

Sometimes from banks. Sometimes from NBFCs. Sometimes informally at 18–24% annualized cost.

That cost doesn’t disappear.

It quietly enters pricing.

Over time, Vendor B starts adjusting.

Not dramatically. Subtly.

On paper, the corporate still thinks it’s getting competitive pricing.

But in reality, it is paying a liquidity uncertainty premium.

Vendor A, who gets paid in 15 days, behaves differently:

Because stable cash flow builds confidence.

Cash flow isn’t just financial.

It’s psychological.

When vendors trust payment cycles:

When payments are delayed:

Trust erosion doesn’t show up on balance sheets immediately.

The InvoRush Journal

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