Time to realized revenue (TTRR) is a valuable metric, giving insights into the payment dynamics and the issues created when outstanding invoices age too long, harming cash flow.
In “Accelerating the Time to Realized Revenue,” a PYMNTS and Mastercard collaboration, we surveyed 100 corporate executives from companies across Canada, exploring ways that days sales outstanding (DSO) can be reduced using the right technologies for the job.
Noting that a global recovery is underway, the study says that CFOs and corporate treasurers are “still struggling keep their firms’ business-to-business (B2B) payment flows running smoothly. PYMNTS’ latest research, conducted in collaboration with Mastercard, found that it is taking longer than ever for businesses to receive payments and book that revenue on their ledgers.”
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Large-Market Firms Ahead on Virtual Cards
An important finding in the research is the role that virtual cards are fulfilling in shrinking DSO.
Per the study, “Canadian businesses believe virtual cards are one of the key digital payment innovations that can alleviate mounting days sales outstanding (DSO) woes. The roughly 52% of the nation’s firms that use virtual cards say doing so benefits their payment operations in myriad ways, with quicker payment receipt being chief among them.”
Sixty-nine percent of Canadian firms using virtual cards say that faster payments are their key benefit.
Virtual cards are getting a lot of press during the pandemic, with improving transactional details providing more security and better cash-flow management, among other pluses. While larger firms were found to be in the lead at present, faster payments are sought by all.
“Canadian large-market firms are ahead of the curve with virtual cards with 51% of them using the technology,” the study states. “They also are more likely to use technologies such as supplier portals, artificial intelligence and dynamic terms. It is no coincidence that they also report shorter average DSOs than their mid-market counterparts.”
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A Keen Interest in Real-Time
Real-time payments are also on the minds of Canadian executives — as is the case with their counterparts globally — with companies looking for ways to shorten DSO by any digital means.
According to the study, “Real-time payments are another key technology on Canadian businesses’ radar. Not only are 37% of all Canadian businesses ‘very’ or ‘extremely’ interested in implementing real-time payments when they become available, but they also expect the capability to yield several additional benefits.”
Surveyed executive managers have expertise in accounts payable, accounts receivable and treasury management across healthcare, manufacturing, transportation and logistics/shipping from firms with annual revenues of over $10 million CAD ($7.8 million USD).
Get the study: Accelerating the Time to Realized Revenue
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