The working capital hiding in your payment mix
Most accounts payable files aren’t the result of a strategy. They’re the result of years of one-off supplier negotiations, each one reasonable in isolation, and none of them adding up to anything coherent.
In one case, the Commercial Card Consulting team at U.S. Bank reviewed that number, which reached 95 different combinations of payment terms and methods—net 30 here, net 45 there, checks for one supplier, ACH for the next. Procurement had been letting every new supplier dictate its own preferences, and the cost of that drift wasn’t a line item anyone was tracking. It was working capital sitting on the wrong side of a clearing window.
How payment sprawl quietly drains working capital
That kind of disorder isn’t unusual, but it’s increasingly difficult to justify when finance teams are trying to wring more cash out of existing operations. Eighty percent of the 2,400 finance leaders Visa surveyed in collaboration with U.S. Bank in late 2025 rated improving cash and working capital forecasting as a very or extremely important transformation initiative for the year ahead, ranking it second only to fraud prevention. Yet checks still account for 12% of total commercial payment volume and remain in regular use at 62% of the companies surveyed—a habit with a measurable cost.
Modern check payments don’t carry much disbursement float since the Federal government’s 2004 Check 21 law collapsed clearing times. Virtual cards, by contrast, offer considerably more working capital opportunity. “The working capital comes from the ability to pay your provider back in a timeframe that extends beyond the original payment timeframe,” says Kyle Frase, vice president of Commercial Card Consulting at U.S. Bank. This is a meaningful advantage for companies restructuring their supplier base around card and virtual card rails.
The leverage tends to be largest where suppliers already accept cards but were simply never asked. “There are suppliers that will take card if asked, as it’s baked into their process regardless of payment speed,” Frase says. “These suppliers provide a large opportunity to gain working capital benefits with this volume.”
What a more streamlined approach looks like
Frase’s team worked through the client’s sprawling accounts payable file by first building a visual picture of how scattered its payment terms had become. The fix was a default: virtual pay upon approval, or a check at net 60. “The client began to funnel new suppliers to a preferred payment strategy,” he says, using a single template that procurement could apply unless a specific supplier relationship required something different.
The result wasn’t perfect uniformity; exceptions remained, and Frase is candid that they always will. But the new state was a focused strategic direction rather than the accumulated debris of one-off negotiations. This research points to where the broader market is heading: surveyed companies expect virtual card and ePayables volume to grow from 8.1% to 10.4% of total payments over the next twelve months, the single largest gain across all methods, while checks register the largest expected decline. 78% of surveyed companies plan to expand their virtual card programs during that window.
The supplier side, and why CFOs hesitate
The other half of the equation is suppliers, who carry interchange costs and processing overhead when buyers shift them onto cards. Frase is realistic about what a fair exchange looks like—suppliers get paid sooner, which is a partial win, but the right balance depends on the relationship and the goods involved. Forcing a single answer across an entire vendor base, in his view, breaks the model.
Most CFOs understand the destination well enough. “The DPO extension is top of mind, and the connection to the bottom line is second nature,” Frase says. What’s harder to see from the top is the path to get there. “Implementation takes time and effort. Changing negotiating tactics for payment terms and type takes effort, as does supplier communication and collaboration. So while the CFO understands the downstream impact, they may not appreciate what it takes to get there.”
That path also runs into a more familiar obstacle: internal inertia. “Change management is hard,” Frase says. “Overcoming the internal mantra of ‘this is how we’ve always done it’ is much more difficult in reality than in theory.”
The work begins with a shared philosophy established at the top—between the CFO, controller and treasury—about what the procure-to-pay process is actually supposed to accomplish. Procurement can then execute against that framework rather than improvising supplier by supplier. Without that anchor, an AP file tends to end up looking a lot like the one with ninety-five combinations: not so much a strategy as the residue of its absence.
Understanding what your payment mix is really doing
Most companies didn’t choose their current payment mix; it accumulated over time, one supplier negotiation at a time. Taking a deliberate look at how payments are structured, where working capital is being left on the table and which suppliers are already positioned to support a shift can reveal opportunities that don’t require significant investment to capture. A payments partner with experience in payment optimization can help finance teams build that picture and make a practical case for change.
U.S. Bank works with finance teams at every stage of that journey.
