Corporate finance has spent the past several years pursuing a straightforward ambition. Get cash moving faster.
And by many measures, the strategy is working. Data in “Time to Cash: What Two Years of Data Say About Faster Cash and Rising Risk,” a PYMNTS Intelligence report produced in collaboration with J.P. Morgan, found that nearly 9 in 10 CFOs surveyed (87%) say their overall cash flow cycle improved over the past year, while 80% shortened their cash conversion cycle.
But during that same period, the Time to Cash™ study’s Velocity Index fell from 73 to 70, and the share of high-velocity companies dropped from 29% to 20%.
The five explanations unearthed by the report are revealing.
- Customers Are Turning Payment Terms Into a Source of Financing
The bigger threat to working capital, according to the PYMNTS Intelligence report, may no longer be customers paying invoices late. It may be customers negotiating contracts that allow them to pay much later without ever becoming delinquent.
What’s happening: Just 38% of CFOs reported improvement in customer payment-term behavior, down from 73% a year earlier. Meanwhile, improvement in overdue payments barely changed.
Payment terms are becoming a competitive instrument in commercial negotiations. A company can improve collections efficiency and still sacrifice liquidity through concessions made by its sales organization.
- Finance Has an AI Execution Gap, Not an AI Adoption Gap
Finance teams today typically have artificial intelligence capable of recommending what to do with cash. Far fewer have deployed agents capable of autonomously carrying out financial tasks.
What’s happening: Among those firms surveyed by PYMNTS Intelligence, AI adoption in cash management reached 94%, generative AI usage climbed to 80%, and 64% of companies now use AI-generated insights in cash decisions. Yet just 5% report using agentic AI tools, compared with 6% a year earlier.
After all, forecasting a liquidity shortfall is one problem. Authorizing a transfer, changing a payment schedule or reallocating cash across accounts introduces another set of controls, permissions and responsibilities.
Read the report: Time to Cash™: What Two Years of Data Say About Faster Cash and Rising Risk
- The Finance Software Market May Be Running Into an Integration Ceiling
The biggest obstacle to further automation may no longer be whether financial technology can perform a task. It may be whether the technology can operate economically within a company’s existing infrastructure.
What’s happening: Companies surveyed by PYMNTS Intelligence for the report now automate an average of 73% of receivables processes, up from 55%. But 90% cite integration complexity as a barrier to further automation, compared with 67% last year.
The value of another standalone application diminishes when connecting it to ERP systems, banking platforms and customer databases introduces new implementation costs and operational dependencies.
- Cash Flow Is Becoming a Companywide Performance Metric
Finance can accelerate invoice issuance and improve forecasting, but sales determines payment terms, procurement influences supplier obligations, and operations affects fulfillment and billing.
What’s happening: The share of companies embedding cash flow KPIs across business units surged from 5% to 58% in a year.
The next CFO transformation may involve changing how the rest of the company makes decisions, rather than changing how finance measures them
- The Next Treasury Risk Is Having Cash You Can’t Move
Treasury resilience is becoming a question of access and operational redundancy, not simply available cash or the ability to identify fraudulent transactions. That distinction becomes more consequential as businesses automate payment workflows and rely on interconnected banking and technology systems.
What’s happening: 88% of CFOs feel highly prepared to communicate fraud and cyber losses to their boards. Just 62% feel similarly prepared to absorb those losses without disrupting operations, and only 39% maintain backup payment rails and banking relationships.
CFOs can automate collections, improve forecasts and use AI to identify liquidity opportunities. But those gains can be offset by payment terms negotiated by sales, systems that cannot communicate, and disruptions that prevent otherwise available money from moving.
At PYMNTS Intelligence, we work with businesses to uncover insights that fuel intelligent, data-driven discussions on changing customer expectations, a more connected economy and the strategic shifts necessary to achieve outcomes. With rigorous research methodologies and unwavering commitment to objective quality, we offer trusted data to grow your business. As our partner, you’ll have access to our diverse team of PhDs, researchers, data analysts, number crunchers, subject matter veterans and editorial experts.
