The biggest working capital opportunity starts before the invoice. CFOs can automate collections and accelerate reconciliation, but extended payment terms negotiated by sales teams can erase those gains before revenue is booked.

Better sales contracts can unlock millions in liquidity. By factoring financing costs into pricing, payment terms and customer profitability, CFOs can protect cash flow without sacrificing profitable growth.

Working capital is becoming a commercial growth strategy. Finance leaders are moving upstream into sales negotiations, using data and predictive analytics to turn payment flexibility into a competitive advantage rather than a hidden cost.

The biggest threat to a company’s working capital strategy is now commonly hiding in a perfectly drawn up sales contract, not an overdue invoice.

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Finance departments can automate collections, optimize cash forecasts and accelerate reconciliation. But when commercial teams negotiate longer payment terms to win customers, the cost of financing growth gets decided before treasury enters the conversation.

Longer payment terms have become an established negotiating tool, particularly when large enterprise customers can leverage their purchasing power to demand more flexibility from suppliers. And for commercial teams, extending payment terms can appear to be a relatively inexpensive way to close a deal without reducing its headline price.

But for finance, these sales tactics are anything but free. The single concession of giving customers another 30, 60 or 90 days to pay ultimately offloads the cost of financing that decision to the treasury and CFO office.

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