Don’t overlook a slowdown in customer payments

Billtrust CFO David Zwick warns his peers not to overlook a growing challenge in cash conversion cycles: customers taking longer to pay their bills.

A recent Billtrust survey of 550 finance pros found that two-thirds reported their customers are paying slower than six months ago, and one in five indicated that payment times are “significantly slower.”

“Cash velocity,” as Zwick called it, “is a huge thing.”

Board members are more closely scrutinizing cash conversion amid high interest rates and interest expenses, Zwick said, which is “becoming a larger use of cash, so…the cash balances aren’t growing as fast as they were before.”

“That causes a lot of companies to start paying their bills slower than they had before,” Zwick told CFO Brew, “because they’re looking for ways to make up for that working capital shortfall they’re experiencing.” Consequently, businesses waiting for payments to come in are in a tougher position, because that anticipated revenue “doesn’t really count until you convert it into cash.”

Other research supports a slight worsening of cash velocity in recent years.

Publicly traded companies showed an improvement in days payable outstanding (DPO) on their 2024 annual reports, but days sales outstanding (DSO) and days inventory outstanding (DIO) worsened slightly. That’s according to an analysis of the top 1,000 public US-based non-financial companies that The Hackett Group released in August 2025.

The consulting firm noted that DSO and DIO deterioration reflected “macroeconomic volatility, cautious inventory strategies, and shifting customer dynamics.” (Not to mention, a lot has happened since companies filed their 2024 annual reports, including the Iran war and the Trump administration’s on-again, off-again, back-on-again tariffs scheme.)

“Finance departments and CFOs that I’m talking to are all looking for ways to get that kind of trapped receivable converted into cash quicker,” Zwick said.

Response plan. How can CFOs improve their organizations’ cash velocity? About half (48%) of CFOs in the Billtrust survey said their companies are managing cash more conservatively by “building reserves and tightening payment terms.”

More than four in five (82%) US-based respondents said their organizations offer early pay discounts to reduce days sales outstanding (DSO), according to the 2025–2026 Growth Corporates Working Capital Index, a Visa-PYMNTS Intelligence survey of 322 North American CFOs and treasurers conducted from May 23 to July 18, 2025.

Beyond that, two-thirds said they accept card payments as another method of DSO reduction. After that, the next two most popular DSO reduction strategies, each chosen by about two-fifths of the finance executives, were reducing terms and getting stricter on approving buyers.

Organizations may be tempted to cut ties with late-paying customers, Zwick said, but they should try other options like adjusting payment terms first. “Someone who isn’t really worth it on a 60-day term might be a perfectly good customer if they paid in 15 days or up front,” he said.

Or if those tardy customers are paying manually (yes, businesses still use paper checks), asking them to pay digitally “shrinks that time that it takes to convert the revenue into cash,” Zwick offered.

High time. Speaking of digital transactions: Automation is another key way to address slouching cash velocity, according to Zwick, who said finance tends to be at the bottom of organizations’ automation priorities.

But with automation already adopted in R&D, product, sales, and marketing for enterprises, companies are getting wise to the benefits of automation financial processes, he added.

“The finance area is getting squeezed,” Zwick said. “They’re not generating their cash as quickly as they used to, and even for those that are, there’s all this pressure on them to generate the cash even faster.” Now, he added, companies are “doubling down” on automation tools in finance “throughout the whole order-to-cash process” to get the cash into their hands faster.