Corporate treasurers
How to stop them talking to themselves
Published by Mastercard, September 2023
At the end of every buyer is a supplier. At the end of every supplier is a buyer. Both want the best terms: high “days payable outstanding” (DPO) for buyers so they can defer payments as much as possible; low “days sales outstanding” (DSO) for suppliers so they can receive payments as quickly as possible.
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Corporate treasurers often find themselves on both sides. Whether negotiating payment terms with an external partner or juggling accounts payable (AP) with accounts receivable (AR) across internal teams, a day spent darting between buying and supplying can make treasurers feel like they are talking to themselves.
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The result is a circular tug of war with treasurers feeling like they are pulling on both ends, albeit not at the same time. They know the questions to ask, and the unevenness of responses is palpable. Some efficiency in access to reliable data is needed, particularly regarding working capital.
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No wonder that 77% of AR teams in the US are not completely up to date on invoices, according to a 2023 survey, and 45% of companies worldwide note tension between AP teams and suppliers around late payments, according to a 2022 survey.
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