March 2020 triggered a massive slowdown in B2B payments flows. Today, 39% of U.S. and Canadian firms wait longer to receive payments now than they did in 2019, according to Accelerating The Time To Realized Revenue, a PYMNTS and Mastercard collaboration based on a survey of 400 corporate executives.
Enterprise firms in the United States (those with $1 billion or more in annual sales) have been hit especially hard, with 48% saying their days sales outstanding (DSO) have increased over the past two years.
As a result of the slowdown, U.S. and Canadian firms are waiting an average of 45 days to receive payments.
Companies cite several key friction points. U.S. businesses report that the three most pressing challenges they face when receiving payments are reconciliation (cited by 44%), manual collection (21%) and late payments (12%).
Canadian businesses put fraud at the top of their list, with 22% citing it as a challenge. Other they note include reconciliation (17%), manual collection (13%) and manual tracking (13%).
To streamline their payment processes, many firms leverage technology. Supplier portals are the technology most commonly used by businesses of all sizes in both the U.S. and Canada. In fact, 100% of large-market firms in the U.S. and 98% of those in Canada use them. Overall, 92% of firms report using supplier portals.
In addition, among all firms, 78% use dynamic terms, 44% use artificial intelligence (AI) systems and 7% use Blockchain/smart contracts.
By investing in digital innovations like these that can help them receive payments faster, U.S. and Canadian firms can reverse the trend and shorten their DSO measurements.
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