Large Companies Face Limits on Delaying Payments
💰 Large Companies Face Limits on Delaying Payments.
According to recent working capital research by The Hackett Group, the largest US companies are finding it increasingly difficult to extend payments to suppliers, indicating a potential ceiling on the practice of supplier payment terms optimization. The analysis of data from 1,000 of the largest US public companies revealed that days payable outstanding (DPO) decreased by nearly five days in 2022, suggesting a decrease in the ability to delay payments. Companies faced headwinds such as inflationary pressures, supply chain disruptions, and geopolitical instability, resulting in a 3% deterioration in overall working capital performance. The research highlights the challenges companies are facing in maintaining a balance between cash flow management and supplier relationships.
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