Tariffs are reshaping the global economy, and according to experts, they could trigger a full-blown recession if left in place.
Torsten Sløk, Chief Economist at Apollo Global Management, didn’t mince words in a recent CNBC interview:
“It’s all conditioned on tariffs staying in place at these levels, and if they stay at these levels, we will absolutely have a recession in 2025.”
But you shouldn’t wait for a formal recession to be declared—start managing cash flow like you’re already in one.
For CFOs and FP&A teams, this means moving beyond rigid planning cycles and outdated assumptions, and prioritizing protecting liquidity and ensuring operational resilience. Because the teams that prioritize cash flow management during a crisis will be the ones who stay ahead.
Below are seven strategies your business can adopt to manage cash flow amid a potential recession and stay ahead of economic uncertainty.
1. Switch to rolling forecasts to keep up with real-time cash changes
In today’s volatile market, static forecasts break faster than they’re built.
When tariffs spike overnight, supplier costs increase, or customer payments slow down, monthly or quarterly forecasts are already outdated by the time they’re reviewed.
That’s why more finance teams are shifting toward rolling forecasts that update continuously with the latest financial and operational data.
“Gone are the days of the fixed annual budget,” says Vena Co-founder and Chief Solutions Architect Rishi Grover. “We now need to re-forecast on a much more frequent basis and be able to bring in your latest set of financial and operational actuals to help supercharge these models and also help support scenario modeling.”
2. Extend Days Payable Outstanding (DPO) to preserve cash
When recession pressure builds and cash flow tightens, holding onto cash just a little longer can improve liquidity and strengthen your financial position in uncertain times.
That’s why extending your Days Payable Outstanding (DPO)—the average number of days you take to pay suppliers—is one of the simplest, yet most effective ways to preserve liquidity.
However, delaying payments for too long can strain vendor relationships, cause operational delays, or even result in lost discounts. After all, the goal isn’t to delay indiscriminately, but to renegotiate more strategic terms and prioritize payments based on their business impact.
3. Shorten Days Sales Outstanding (DSO) to speed up cash collection
When cash flow is tight, receiving payments faster can be just as critical as slowing down payouts. That’s where optimizing your Days Sales Outstanding (DSO)—the average number of days it takes your company to collect payment after a sale—becomes crucial to maintaining strong liquidity.
To protect their cash position, finance teams need to become more proactive about collection cycles without damaging customer relationships.
Start by segmenting your receivables by risk level, so you can prioritize outreach accordingly.
4. Reevaluate vendor contracts to optimize costs
Another overlooked lever when it comes to protecting cash flow is your vendor agreements.
Many companies continue paying for tools and services they no longer need at the same scale, or that could be consolidated with others. And as budgets tighten, vendors are more open to renegotiation than you might think.
Reevaluating contracts gives finance and procurement teams a practical way to reduce costs without disrupting operations. During periods of economic uncertainty, every dollar spent must justify its value, and vendor contracts often hide more flexibility than most teams realize.
5. Maximize profit margins by analyzing product lines
During a looming or actual recession, you have to protect your profit margin as much as you cut costs. One of the most effective—and underused—ways to improve profitability is by analyzing which product lines are helping or hurting your bottom line.
However, some finance teams don’t examine product-level profitability closely enough, especially when it’s buried under rolled-up profit and loss statements or spread across multiple business units.
Now more than ever, your team needs visibility into:
- Which product lines are high-margin vs. margin-draining
- Which customers or SKUs (for retailers) are costing more to serve than they return
- Where bundling, repricing, or even pausing production could free up capital
6. Foster a cash-conscious culture across the organization
The best cash flow strategies won’t go far if Finance is the only team thinking about them.
Even before a recession, it’s crucial to cultivate a company-wide mindset that views cash as the limited, high-priority resource it is. Of course, this doesn’t mean turning every department into a cost hawk. It means giving people visibility into how their choices impact the company’s financial health and ultimately building alignment.
Effective, ongoing business partnering between finance teams and other departments is one of the best ways to achieve this.
7. Automate financial processes to enhance efficiency
When finance teams are under pressure, time becomes one of their most valuable (and limited) resources. Yet, many still rely on manual processes for tasks that could be automated.
Repetitive tasks, like consolidating actuals from different systems, updating forecasts, or chasing budget approvals across teams, can drain hours that should be spent on higher-impact work. That’s why automation is especially powerful during times of economic uncertainty.
AI is also a lever that finance teams should look to tap. An AI assistant purpose-built for FP&A such as Vena Copilot can help time-stretched finance teams reduce time spent digging through spreadsheets by drafting forecast commentary, suggesting variance explanations and answering complex questions in seconds.
