Why Working Capital Programs Plateau, and How Leading Organizations Keep Creating Value
By • 6 minute read
Most working capital programs deliver strong early results. Far fewer sustain that momentum.
After the initial gains are realized, supplier participation slows, executive attention shifts, and progress begins to flatten. Yet some organizations keep expanding liquidity and improving financial performance year after year.
What sets them apart is how they approach working capital.
During the latest edition of Pay or Be Paid On Your Terms Executive Series, PrimeRevenue Chief Commercial Officer Eric Riddle joined VP of Commercialization and Growth Stefanie Nelsen to discuss why some programs plateau while others continue to create value. Drawing on more than two decades of experience advising CFOs and treasury leaders, Eric shared practical insights into what distinguishes organizations that treat working capital as a strategic capability rather than a one-time initiative.
Here are five takeaways from the discussion.
1. Working Capital Is a Strategic Discipline
For many organizations, working capital optimization begins with a specific objective, whether funding growth or strengthening the balance sheet.
Leading organizations take a different view, embedding working capital improvement into the way the business operates rather than treating supply chain finance as a discrete project. Success is measured by continuous improvement over time rather than by a single liquidity event.
Eric emphasized an important distinction: the corporate working capital strategy and the financing programs that support it are not the same thing. Maintaining that separation helps organizations preserve flexibility while ensuring programs continue to align with accounting, treasury, and business objectives as they evolve.
2. Operational Discipline Creates a Compounding Cash Advantage
Recent EY-Parthenon research, based on S&P Capital IQ data, shows how wide the performance gap has become between leading organizations and the broader market.
Top-performing companies achieved:
- A 10-day advantage in cash conversion cycle performance.
- Six fewer days sales outstanding.
- 6x higher free cash flow conversion during periods of disruption.
The data points to a broader reality: working capital excellence compounds.
Organizations that invest in visibility, governance, automation, and liquidity management before disruption occurs are better positioned to preserve cash and keep investing when market conditions become more challenging.
As Eric noted during the session, disruption is often where the strongest organizations create even more separation.
3. Most Programs Plateau for Three Predictable Reasons
Across hundreds of working capital programs, the same patterns consistently emerge when momentum slows.
Executive sponsorship fades. As competing business priorities emerge, supplier onboarding slows and continuous optimization gives way to maintenance.
Financial scrutiny increases. As programs grow, finance and accounting leaders naturally reassess how they are structured, governed, and disclosed to ensure they keep supporting long-term financial objectives.
Supplier participation reaches its limit. Traditional onboarding models efficiently serve strategic spend suppliers but often struggle to engage the tactical- and tail-spend suppliers where significant liquidity opportunities remain.
The encouraging news is that none of these barriers are inevitable. They are operating challenges, and operating challenges can be redesigned.
What We’re Seeing
Organizations that continue expanding their working capital programs share one characteristic: they treat liquidity as an enterprise capability rather than a treasury initiative.
Executive alignment, cross-functional collaboration, scalable supplier onboarding, and continuous measurement consistently distinguish programs that continue creating value from those that level off after their initial success.
4. Working Capital Requires More Than One Lever
During the session, attendees identified accounts payable as their primary working capital focus, a reflection of where many organizations begin.
Leading finance teams, however, are taking a broader view. Dynamic discounting, receivables finance, supplier liquidity, payment modernization, and fraud prevention all contribute to stronger financial performance. Rather than optimizing a single process, these organizations build integrated liquidity strategies that improve resilience across both payables and receivables.
Working capital now reaches well beyond extending payment terms, into greater financial flexibility across the business.
5. Scale Requires a Different Operating Model
The session concluded with an example of one global organization that expanded supplier participation well beyond the traditional limits of supply chain finance.
Rather than relying exclusively on a conventional reverse factoring model, the organization complemented it with a streamlined payment agent approach designed specifically for long-tail suppliers. The result was participation from approximately 3,700 suppliers, including roughly 2,000 that would have been difficult to reach through traditional onboarding, plus $276 million in receivables-side working capital improvement.
The takeaway was the recognition that different supplier segments often require different engagement models.
Organizations that redesign onboarding, not only financing, unlock greater value across their supply chains.
From Insight to Action
Working capital leadership is often defined by whether its operating model continues creating value year after year.
The organizations pulling ahead treat working capital as an ongoing strategic capability, supported by executive sponsorship, scalable supplier engagement, and a portfolio of liquidity strategies that evolve alongside the business.
In the coming weeks, we’ll take a deeper look at three topics that generated the most discussion during the session: why working capital programs plateau, what separates market leaders from their peers, and how one organization expanded supplier participation to more than 3,700 suppliers.
There’s always more working capital to unlock. The real question is whether your operating model is built to keep finding it.
