Editor's Note: This article is part of Scotiabank's three-part Liquidity Management Series, exploring strategies to help organizations strengthen liquidity, optimize working capital, and improve capital deployment. Read the previous articles in the series:
- Beyond the Buffer: Turning Liquidity into a Strategic Advantage
- Working Capital in Practice: Execution Inside the Payment Lifecycle
Payments are still treated as a back-office function in many organizations, measured by speed, cost, and accuracy. In a higher-cost, more volatile liquidity environment, that framing is too narrow: payment design now influences when cash leaves the business, how long it remains available, and how effectively it can be deployed.
Payment design is not just operational. It is a capital decision that affects liquidity flexibility, funding needs, and the return earned on cash before it leaves the balance sheet.
Scotiabank’s view is straightforward. Organizations that plan payment structure deliberately gain more control over liquidity, more resilience in day-to-day funding, and more choice in how capital is deployed.
Why Payment Design Now Drives Capital Efficiency
Payments have traditionally been managed as a processing function, with success defined by accuracy and timeliness. That remains necessary, but it is no longer sufficient for treasury teams under pressure to improve liquidity performance.
Payment timing and settlement method directly affect cash availability, determining how long funds remain available to support operations, reduce borrowing, or fund near-term priorities. As a result, leading organizations are evaluating payment methods not only on execution quality but on how payment timing supports broader working capital goals.
That broader treasury context is increasingly visible in external surveys. Euromoney’s 2025 Cash Management Survey, based on input from 30,000 corporate treasurers across 123 countries, highlights continued focus on digital tools, payables and receivables automation, liquidity management, connectivity, and service quality—reinforcing that payment strategy is now closely tied to visibility, control, and operating efficiency1. In practice, that starts with greater attention to how payment methods shape the timing and availability of cash.
- The payment method chosen determines when cash leaves the business and when it is no longer available for other uses.
- Extending settlement timing can allow organizations to retain cash longer without renegotiating supplier terms or changing procurement arrangements.
How Small Timing Shifts Create Outsized Financial Value
The value of payment structure is most visible when translated into working capital outcomes.
One example is virtual card-based payment structures, where settlement timing can extend the buyer’s effective payment cycle without altering supplier due dates. Market reporting indicates these structures can add 30 to 60+ days of float in some cases, showing how a targeted shift in payment design can create meaningful liquidity value.
Even modest extensions in settlement timing can release meaningful working capital, particularly in high-volume environments where small timing changes compound across large payment runs. The result is greater flexibility to support operations, reduce funding needs, and improve returns on capital. That is why payment timing deserves attention as a strategic financial lever, not just an execution detail.
Recent external research reinforces the same point. Visa’s 2025–2026 Growth Corporates Working Capital Index, based on nearly 1,500 CFOs and treasurers across 10 industries, found that working capital is increasingly being managed as a growth tool rather than a defensive buffer, with respondents reporting average savings of $19 million from more strategic use of cards, AI, and external working capital solutions2.
Execution Determines Whether the Value Is Realized
The strategy delivers only if execution is disciplined.
- The organizations that capture the greatest value are typically those that treat payment strategy as an ongoing treasury discipline rather than a one-time process change. Clear decision-making, consistent execution, and supplier alignment help ensure the benefits are sustained over time. Payment workflows need to remain simple and repeatable so teams can execute consistently without adding operational burden.
- Suppliers are more likely to adopt new payment methods when timing is clearly communicated and consistently delivered.
Broader market data suggests that organizations treating this solely as a systems change often struggle to realize the full value. The same pattern is evident in broader market data. KPMG’s Global Treasury Survey 2025, as reported by CTMfile, found that while 57% of treasuries are now centralized, only 18% describe their processes as highly automated and just 22% report complete real-time cash visibility—evidence that structure alone does not create value unless operating processes and data are equally mature3.
What This Means for Treasury Leaders
For treasury leaders, payment timing is becoming a practical tool for improving liquidity control without reopening supplier terms or procurement frameworks.
That control improves agility, helping organizations respond faster to changes in demand, funding conditions, or investment priorities. It also strengthens planning by reducing volatility in cash positions and supporting more accurate forecasting. PwC’s 2025 Global Treasury Survey points to the same conclusion. Based on input from 350 treasurers, it shows treasury becoming a more strategic, data-driven function, with leading organizations using centralized payment models, real-time liquidity tools, and AI-enhanced forecasting to improve working capital efficiency and unlock trapped cash4.
The benefit is visible in day-to-day liquidity management, and the direction of travel is becoming clearer.
Mastercard's 2026 perspective underscores the same shift. It argues that AI is making commercial payments more predictive and strategically useful, helping companies improve cash flow and reduce back-office complexity.
Control of Timing Is Control of Capital
As payment methods evolve, the financial value of payment timing is becoming more visible. The structure of a payment now directly influences how long capital remains in the business and how effectively it can be deployed.
Organizations that manage payment timing deliberately can improve working capital performance, support more predictable liquidity, and do so without changing supplier terms or disrupting procurement processes.
Scotiabank has similarly noted that richer payment data and better connectivity are making payments more visible, actionable, and strategically relevant.
The strategic question is no longer simply how payments are processed, but how deliberately payment timing is managed. When designed well and executed with discipline, payment strategy can strengthen working capital, improve liquidity control and forecasting, reduce funding pressure, and give treasury leaders greater flexibility in how capital is deployed. In that context, payment strategy is increasingly a core part of capital strategy.
Let's Continue the Conversation.
Connect with your Treasury Management Office representative or contact us to discuss how a more deliberate approach to payment strategy can help support liquidity management, working capital performance, and capital deployment decisions.
1Euromoney Cash Management Survey 2025
2Visa’s 2025–2026 Growth Corporates Working Capital Index
3KPMG: Global Treasury Survey 2025: Focus on structure, technology and ESG
4PwC’s 2025 Global Treasury Survey
5MasterCard: Payment trends in 2026
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