How New US Tariffs Are Intensifying Cash Flow Challenges for Manufacturing & Consulting Firms

Right now, the sentiment among mid-sized manufacturing and consulting firms is shifting rapidly, spurred by significant tariff hikes implemented by the US across virtually all trade partners.

Recent studies highlight that just 20% of business leaders remain optimistic about economic growth prospects through 2025—a sharp decline from 65% in late 2024. Over half (55%) now foresee a recession within the year, reflecting a 19-percentage-point rise in concern within mere weeks.

Yet despite this pessimism, investors and stakeholders continue to hold firms accountable to deliver immediate financial results while simultaneously investing strategically in long-term resilience.

Why Should This Matter to CFOs and AR Leaders?

"The scale and suddenness of the tariffs have blindsided many companies," explains Marc Gilbert, managing director and senior partner at BCG. "The ripple effects on cash flow and invoice management processes are profound, complicating AR operations and intensifying pressure on liquidity."

What We Found:

A recent survey among US-based CFOs and finance leaders highlighted several critical impacts:

• Stagnating Cash Flow & Increased Complexity: 62% reported increased difficulty in maintaining cash flow due to delayed payments and heightened disputes.

• Higher DSO Due to Tariffs: Over 74% experienced delays in payment cycles, exacerbating already stretched accounts receivable operations.

• Rising Operational Costs: 69% anticipate further deterioration of margins due to increased pricing volatility and operational disruptions stemming from tariffs.

Immediate Implications for AR Management:

Given this landscape, finance leaders at manufacturing and consulting firms are facing unprecedented pressure:

• Pressure to Preserve Margins: Despite volatile external conditions, 81% of investors still expect companies to hit or exceed short-term earnings projections.

• Demand for Cash Flow Predictability: 76% stress maintaining consistent dividend payouts, underscoring the necessity of reliable cash flow management.

Strategic Response & Opportunities:

According to Jeff Kotzen, managing director at BCG, “Companies must act swiftly to bolster their AR processes, emphasizing margin preservation, timely collections, and stronger negotiation capabilities.”

• Optimizing AR Workflows: Firms must streamline invoice follow-ups, proactively manage disputes, and ensure faster reconciliations to counteract tariff-driven disruptions.

• Leveraging Hybrid AI Solutions: Traditional methods—manual follow-ups, spreadsheet reconciliations, and rigid APIs—are no longer sufficient. Intelligent, adaptable solutions like Vasül.ai’s hybrid agents offer agility and immediate ROI, crucial during volatile economic conditions.

Vasül.ai's Hybrid Agent Solution:

Vasül.ai uniquely addresses tariff-induced complexities by combining API flexibility with robust browser-based automation—ideal for legacy systems like SAP ECC and on-prem CRM platforms often found in mid-sized firms.

• Rapid Deployment: Immediate impact without lengthy IT projects or heavy integrations.

• Flexible Reconciliation: Automated reconciliation leveraging AI-driven fuzzy matching logic to quickly resolve discrepancies.

• Enhanced Negotiation & Compliance: Smart negotiation agents proactively handle payment terms and manage disputes within guardrails—strengthening liquidity management.

Now What?

Manufacturing and consulting companies must pivot quickly, balancing short-term financial discipline with strategic investments in AR automation. Enhancing cash flow management through innovative hybrid-agent technologies like Vasül.ai can provide critical advantages in this uncertain tariff-driven landscape, offering resilience and positioning your business for sustained growth.