For finance chiefs, the problem is not simply how long they can hold on to cash. It is how much of the underlying obligation they can see before it becomes due.
That is the central message of a PYMNTS Intelligence analysis of working capital management, which found that only 40% to 51% of suppliers across major industries are connected to buyers’ order and payment systems. In practical terms, that means roughly half of supplier relationships remain outside the digital infrast...
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ructure many chief financial officers depend on to manage liquidity, approvals and payment timing.
The significance of that gap is growing as commerce becomes faster and more continuous. In a world of always-on transactions, the old rhythm of net 30 or net 60 is giving way to a much shorter window in which finance can decide whether to hold cash, pay early or arrange financing. When supplier information arrives late, the room for manoeuvre shrinks.
The difference can be stark even when two companies have identical contractual terms. If one buyer has integrated purchasing, invoicing and payments, it may know about an obligation at the point of purchase, match the invoice automatically and decide how to settle the amount with more confidence. A second buyer, dealing with a disconnected workflow, may not gain full visibility until the invoice arrives and manual reconciliation begins. The payment terms are the same, but the operational and treasury flexibility is not.
PYMNTS Intelligence’s June Growth Corporates Working Capital Index suggests the scale of the issue varies by sector, but not by much enough to dismiss it. Agriculture recorded the highest level of supplier integration at 51%. Media and technology, and commercial travel, were close behind at 49% each, while retail and marketplaces stood at 47%. Further down the list were construction at 44%, fleet and mobility at 43%, healthcare at 42%, and manufacturing and professional services at just 40%. Read in reverse, those figures suggest that between 49% and 60% of suppliers in the surveyed industries still sit outside integrated order and payment environments.
That matters because working capital is often measured at the end of the process rather than at the point where information first becomes usable. Days payable outstanding, days sales outstanding and inventory measures all tell part of the story, but they do not capture whether finance is seeing obligations early enough to make informed decisions. As the PYMNTS analysis notes, information itself creates optionality.
The broader business case for integration is familiar to procurement and finance teams. Zycus describes supplier integration as the linking of supplier systems with a buying organisation’s processes so data can move without manual intervention, while Deloitte has argued that connecting procurement and finance improves cash flow management, reporting accuracy and visibility into savings. The operational effects are also straightforward: less manual entry, fewer bottlenecks, faster transaction cycles and better visibility over order status.
For suppliers, too, integration can reduce friction. EDI, supplier portals, APIs and procurement networks can make it easier for buyers to place orders and for vendors to share price and availability information quickly. The commercial advantage is not just administrative. Better-connected suppliers can respond faster, support smoother fulfilment and strengthen customer relationships.
PYMNTS Intelligence’s July tracker, Who Decides Now: How Developers and Tech Teams Are Reshaping the Future of AP Payments, found that 58% of small and medium-sized businesses rate integration as very or extremely important when assessing technology. That emphasis is hardly surprising. As finance teams have digitised invoices, automated accounts payable and expanded payment options, integration has become less of a back-office convenience and more of a strategic control point.
The leading companies in this area are not necessarily those with the highest share of integrated suppliers, but those that can turn visibility into action. Virtual cards can impose controls on individual transactions, and automation can make large-scale reconciliation more manageable. PYMNTS Intelligence found in its Growth Corporates Working Capital Index that 80% of high-performing enterprise finance teams use working capital tools such as virtual cards when planning growth, compared with just 2% of bottom performers.
Even so, no tool removes the basic trade-off between the buyer’s liquidity and the supplier’s cash flow. Someone still finances the interval between delivery and payment. What integration changes is the quality of the decision. It makes the interval visible, measurable and, in many cases, financeable.
That is why supplier integration is increasingly being treated as more than an accounts payable project. It is becoming part of the working capital stack itself. Once finance can see an obligation earlier, payment timing stops being merely an administrative deadline and starts becoming a treasury choice.
Source: Noah Wire Services
