Profitable on Paper, Yet Short on Cash Why do Japanese manufacturers often report profits but struggle with cash flow? Long payment terms, Densai, and promissory notes can delay cash collection for 60 to 150 days, even after delivery and customer acceptance. A look at the key differences between Japanese and Western payment practices. Profit is an opinion. Cash is a fact.

Western suppliers require down and interim payments for capital equipment because of long lead times and high cash‑outflow risks. Incoterms define cost allocation, not revenue timing. In global practice, sales are completed at shipment, even under CIF or DDP.