**London**: Businesses face increasing pressure from trade wars and fluctuating rates, prompting Visa and PYMNTS Intelligence to launch new digital benchmarking tools. These resources aim to help mid-market firms improve working capital efficiencies and support CFOs in evaluating their performance against industry peers.
Businesses are currently navigating complex dynamics marked by trade wars, tariffs, and fluctuating interest rates, which have placed a premium on working capital management. Efficient management of funds is critical for day-to-day operations, and as companies engage in transactions, a robust working capital environment fosters a healthy supplier ecosystem across various sectors.
In response to these challenges, Visa and PYMNTS Intelligence have introduced two new digital tools aimed at enhancing corporate benchmarking processes. Recently unveiled, these tools follow the publication of the latest Growth Corporates Working Capital Index, providing executives with accessible resources to evaluate their working capital efficiencies.
Lucy Demery, Senior Vice President and Head of Visa Commercial Solutions in Europe, elaborated on the shifting landscape of commercial transactions. In an interview with PYMNTS’ Karen Webster, she remarked on the “seismic” changes in the business-to-business (B2B) payments arena, stating, “We’re starting to see the massive transformation of B2B payments,” emphasising the importance of supporting high-growth businesses in the current uncertain economy.
The new benchmarking tool and a personalised version of the annual report allow firms to assess their practices relative to industry peers. Specifically designed for mid-market firms, which typically generate between $50 million and $1 billion in sales, these resources are intended to assist CFOs and treasurers in identifying pathways for improvement. The tools enable executives to generate their own index score, comparing their operational and cash flow performance against that of their peers without storing any personally identifiable information.
For instance, a company operating in the European agriculture sector could evaluate its performance and discover a significant increase—by 300%—in the utilisation of corporate and virtual cards. Top-performing firms in this sector reportedly save about $11 million annually on interest payments and inventory costs.
The joint initiative between Visa and PYMNTS has revealed a growing interest in innovative working capital management solutions through surveys conducted with approximately 1,300 CFOs and treasurers across 23 countries and eight industries. Notably, advancements such as virtual cards and tokenised transactions have emerged as leading innovations in capital solutions.
Demery noted the dramatic impact of these technological advancements, citing that the 44% surge in tokens issued last year resulted in a 30% decrease in eCommerce fraud rates. Additionally, the introduction of embedded finance options is increasingly facilitating supply chain payments. Visa has integrated virtual payment credentials into various business software platforms, enabling automated and secure invoice payments.
Demery also highlighted her experience with these technologies and their potential to enhance Visa’s B2B and working capital solutions. A recent collaboration with SAP’s Talia aimed at automating invoice payments using virtual card credentials illustrates the application of insights derived from the growth index.
The benchmarking tool provides CFOs with a clear, actionable comparison that indicates their performance relative to key working capital metrics. It also suggests strategies for improvement, guiding firms toward best practices without resorting to tactics such as extended days payable outstanding (DPO), which can adversely affect supplier relationships.
In broader terms, banks and FinTech companies may also leverage these dynamic reports to refine their service offerings tailored to mid-market companies. Demery concluded by affirming the relevance of benchmarking, stating, “It’s bringing up new ideas around working capital solutions that hadn’t been considered before. With these tools, CFOs and treasurers can become more impactful leaders in their businesses as they drive major efficiencies and direct how the business deploys its capital.”
Source: Noah Wire Services
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