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The 2026 PYMNTS Intelligence Working Capital Index fell 6% to 51.6, reversing three years of gains. The report links the decline to fewer customers paying early, more unpredictable financing needs and a shift toward borrowing for cash flow management.
Working capital efficiency fell for the first time in the four-edition PYMNTS Intelligence index, as North American companies received less cash before invoice due dates and more often borrowed to manage timing gaps. The 2026 report puts the index at 51.6, down 6%, reversing three years of gains and signaling a shift away from using working capital primarily to support planned growth.
The report surveyed CFOs and treasurers at North American companies with annual revenue of $50 million to $1 billion. Across its four editions, the series has covered nearly 1,000 finance leaders. PYMNTS Intelligence says three of the four behaviors used in the index moved in a negative direction in 2026.
The share of payables that firms paid early fell to 17% from 37%. Meanwhile, early receipts dropped to 12% of receivables from 35%, the largest single movement in the study. Two-thirds of receivables arrived on their due dates, while late payments changed little, according to the report. Seven in 10 firms cited uncertainty about when customer payments would arrive, up from 46%.
Borrowing patterns also shifted. The report says 83% of firms used external working capital solutions, a series high, and 61% used at least two. Among firms using these solutions, bank lines of credit rose to 69%. Tactical borrowing for cash flow management and emergencies overtook borrowing for growth, at 45% versus 38%. The report says firms’ unpredictable financing needs more than tripled; it does not provide a separate time window for that comparison in the supplied material.
Cash Timing Is Reshaping Borrowing
The findings suggest that many middle-market companies are adjusting to a change in when cash arrives, even when customers still pay by the due date. Without early receipts, businesses may have less room to pay suppliers ahead of schedule, capture discounts or fund planned activity from available cash. The report describes this as a loss of predictability rather than a broad rise in late payments.
That distinction matters for finance teams and lenders. A company facing a short-lived gap between outgoing and incoming payments may turn to a revolving credit line or card, while a planned investment can involve different financing needs. PYMNTS Intelligence reports that working capital loans fell as bank lines rose, and that corporate and virtual card use quadrupled. The supplied material does not state the cards’ starting or ending share, so the size of their adoption remains unquantified here.
The report also points to a wide divide in firms’ ability to plan. Top performers reported financing needs that stayed constant through the year far more often than bottom performers. Their reported cash conversion cycle was 39 days, compared with 63 days for the bottom tier. These figures describe groups in the survey; they do not establish that a particular treasury tool caused the difference.
Early Payments Had Supported Growth
In the first three editions, PYMNTS Intelligence described middle-market companies using working capital to support expansion. Firms paid suppliers early to obtain discounts, connected suppliers to payment systems and borrowed for plans already in motion. The 2026 report says the relationship between early incoming and outgoing payments had held within three percentage points for three editions.
That pattern changed as fewer customers paid before their due dates. The report says firms tend to pay suppliers in line with how they are paid. When early customer receipts became less common, early supplier payments declined too. A company profile in the report illustrates the pattern: a distributor that had routinely paid suppliers on day 10 of net-30 invoices stopped doing so after major customers shifted to paying on the due date, then drew on a credit line to cover a gap. It is an illustrative account, not a separately identified survey finding.
The report names other pressures on supplier decisions. Tariffs doubled as a cited reason for replacing a supplier, and one in six suppliers was replaced during the prior 12 months, which the report calls a series high. It also says policy rates were lower than when the index began, while firms borrowed more. PYMNTS Intelligence interprets the contrast as evidence that cash timing, rather than the cost of money alone, was the tighter constraint in its survey.
“Customers didn’t stop paying. They stopped paying early, and the cost was certainty.”
— PYMNTS Intelligence, 2026 Working Capital Efficiency Index
The Next Index Will Test Durability
The 2026 findings show a change in one survey series, but the supplied report material does not establish whether the decline will persist across the broader economy. The next edition is expected to help distinguish a temporary shift from a lasting change; its release date and methodology details are not given here.
The report describes AI use among top and bottom performers as widespread: every top performer and 97% of bottom performers used AI in treasury, at similar depth. It also reports differences in willingness to let AI forecast shortfalls, decide when to draw on credit and execute large transactions. The supplied material does not specify how those responses were measured, what safeguards firms use, or whether delegated AI decisions improved outcomes. It reports clear returns on AI at scale for 26% of top performers and 14% of bottom performers, but does not give a time period or define the return measure in the material provided.
It is also unclear whether the supplier replacement and tariff findings reflect the same firms or the same decisions. The report says one in six suppliers was replaced in the last 12 months and tariffs doubled as a reason, but the supplied text does not state the precise baseline for that doubling. Those numbers should not be read as a forecast of future supplier changes.
CFOs Await the Fifth Edition
PYMNTS Intelligence says its fifth edition will indicate whether the 2026 decline was a pause or a new floor for working capital efficiency. The report does not announce a publication date. Until then, its findings describe the surveyed firms and the period covered by the 2026 edition, rather than confirming how companies’ payment patterns will develop next.
The report says surveyed CFOs ranked an advisory relationship with their banks ahead of any specific product when asked what they wanted from lenders. That preference points to continued interest in guidance on forecasting and financing choices, though the report does not say what banks will offer in response. Whether better forecasting can let more firms pay suppliers early despite less predictable customer receipts is also unresolved.
For companies, the reported divide between top and bottom performers centers on predictability: stable financing needs and shorter cash conversion cycles were more common among top performers. The report presents forecasting that finance leaders trust as one route to making early payments affordable. The next index will show whether those practices spread, and whether working capital returns to its earlier role in supporting planned growth.
Key Questions
What happened to the 2026 Working Capital Efficiency Index?
It fell 6% to 51.6, its first decline across the four editions described by PYMNTS Intelligence.
Why did firms pay suppliers early less often?
The report links the decline to fewer early customer receipts. Early receipts fell to 12% from 35%, while early supplier payments fell to 17% from 37%. PYMNTS Intelligence says firms tend to pay suppliers in line with how customers pay them.
Did late customer payments increase sharply?
The report says late payments barely changed. The larger movement was toward customers paying on the due date instead of paying early, leaving firms with less certainty about when cash would arrive.
What financing did firms use more often?
Use of external working capital solutions reached 83% of firms surveyed, a series high. Bank lines of credit rose to 69% of solution users, while the report says working capital loans fell.
Will the index decline continue?
That remains unknown. PYMNTS Intelligence says its fifth edition will help show whether the 2026 fall was a pause or a new floor; no release date is provided in the source material.
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