Working Capital Management for Packaging Companies

Executive Summary

Packaging companies buy materials first and get paid later. That gap squeezes cash. Daylit offers two simple working capital products to help:

• PayLater: supplier-invoice financing with repayment dates set by the approved agreement.
• FundNow: financing against eligible customer invoices, with the advance and repayment terms set by the approved agreement.

These tools shorten the cash gap, cut rush costs, and help you say “yes” to larger or faster orders.

Common Cash Problems in Packaging

• Payment timing: Brands and retailers often pay in 30–90 days. Suppliers want faster payment.
  
• Big material buys: Paperboard, corrugate, films, inks, and plates are bought in bulk and can swing in price.
  
• Project spikes: Launches and promos need tooling and labor before you see cash.
  
• Expedites: When cash is tight, you buy smaller amounts and ship fast, both hurt margin.

Where Daylit helps: at the supplier bill and at the receivable.

Illustrative Packaging Use Cases

Folding Carton Converter:

A folding carton converter could use supplier-invoice financing to buy sheets and inks ahead of a launch. Match repayments to the project’s expected receipts.

Co-Packer for Brands:

A co-packer could evaluate receivables financing to cover payroll and components while waiting for retailer payment.

Corrugated & Displays Plant:

Mixes both: PayLater to pre-buy materials and FundNow on big outbound invoices for seasonal programs.

Working Capital Solutions for Packaging

PayLater (Supplier-Side)

• What it does: Supplier-invoice financing can spread the cash outflow across an agreed repayment schedule.
• Good for: buying early to lock allocation or price, capturing 2/10 supplier discounts, aligning material arrivals with press time.
  
• Pricing: Obtain a written quote covering all fees and repayment dates. The numerical examples below are hypothetical, not current Daylit offers.

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FundNow (Receivable-Side)

• What it does: Provides an agreed advance against an eligible customer invoice.
• Repayment: Confirm the due date, reserve release and responsibility for customer non-payment in the agreement.
• Good for: covering payroll and COGS while waiting on retailers, handling back-to-back launches.
  
• Pricing: Compare total financing cost on the same amount and duration. The example below is illustrative, not a quote.

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Typical operating pattern

• Batching: Group invoices and receivables by project or PO.
  
• Deal size: Match the funded amount to documented project needs and the approved facility.
• Cycle time: Align repayments with the project cash forecast; do not assume that customer payment will arrive on time.

Outcomes Packaging Businesses Achieve by Using Working Capital

• On-time production: Pre-buys reduce changeovers, idle time, and expedites.
  
• Faster cash conversion cycle: Pay suppliers early (often with a discount) and pull cash forward on AR.
  
• More capacity to sell: Take bigger or overlapping orders without waiting for old invoices to clear.

(Exact results vary by business, credit, customers, and suppliers.)

Simple ROI Examples (Illustrative)

A) PayLater for Substrates + Inks

• Invoice: $100,000
  
• Illustrative fee: ~1.8% over ~45 days → $1,800
  
• Early-pay discount captured: 2% → $2,000
  
• Net effect: +$200 before any price-increase savings.
  Plus: if pre-buying also avoids a 1.5% price hike, that’s another $1,500 kept.
  

B) FundNow on a Retailer Invoice

• Receivable: $150,000 (Net-60)
  
• Advance at 90%: $135,000 on day one
  
• Illustrative total cost over a few weeks: ~2.5% → $3,750
  
• Use of cash: keep crews and machines running for a second promo run; avoid expedites and delays.
  
• Decision: Compare the financing cost with the margin and operating costs actually protected.

(These are examples to show the math, not price quotes. Actual terms depend on your business.)

When to Use Which Working Capital Product

• Use PayLater to pre-buy materials, capture 2/10 discounts, or secure price/volume before a busy season.
  
• Use FundNow to get cash against AR when customers pay slow or when you’re scaling fast.
  
• Use both when a big PO needs upfront materials and you’ll wait for payment later.

Quick Working Capital Start Plan

1. Week 0–1: Connect AP/AR. Approve core suppliers and top customers.
   
2. Pilot: Choose a supplier invoice, obtain written terms and compare any early-payment discount with the total financing cost.
3. During production: Reconcile invoices and consider financing only where forecast receipts leave a cash gap.
4. After customer payment: Reconcile the financing balance, fees and reserve release, then review whether the pilot improved liquidity.

Conclusion

Supplier and receivables financing can address different parts of a packaging company’s cash cycle. Evaluate each against written terms and the project forecast, including fees, repayment dates and the consequences of delayed customer payment.

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Further reading

KPMG analyzes cash conversion cycles by industry and company size. See KPMG’s analysis.

Related guidance: Working Capital for Specialty Contractors; Invoice Factoring for Interior Design Cash Flow.

References

• KPMG: Working capital trends in the US market. Read September 28, 2026.