North America's largest companies posted their strongest operating cash flow in more than a decade, yet collected from customers more slowly for a third straight year. The cash cycle only held steady because they paid their own suppliers later.
Key Takeaways
On the headline numbers, corporate North America just had a very good year for cash. Operating cash flow reached its highest share of revenue in 13 years and margins widened. Underneath those figures, the biggest companies on the continent took longer to collect from their customers than they did a year earlier, for the third year running, and the cash sitting in unpaid invoices is now the largest and fastest-growing pool of trapped working capital.
The Hackett Group's 2026 North American Working Capital Survey, released October 5, analyzes the latest fiscal 2025 results of the 1,000 largest nonfinancial companies headquartered in North America. Revenue rose 6% to $17.6 trillion, the EBITDA margin rose to 21%, and operating cash flow reached 17% of revenue, a 13-year high. By most measures a CFO reports to the board, it was a strong year.
Receivables tell a different story. Aggregate receivables grew 11%, nearly twice as fast as revenue. Days sales outstanding (DSO) worsened by 2.1 days, the third consecutive year of deterioration, and slipped in 40 of the 50 industries in the study. Hackett sizes the gap between these companies and top performers at a record $1.94 trillion, up 12%, and the receivables share of that gap jumped 29% to $773 billion, or 40% of the total. Inventory accounts for $616 billion and payables for $548 billion.
"Receivables have become the largest and fastest-growing source of working capital inefficiency," said Gerhard Urbasch, an associate principal at The Hackett Group. The firm is careful to note that the problem often starts before an invoice ever becomes overdue, in credit decisions, order intake and dispute management.
The aggregate cash conversion cycle improved by just 0.2 days, to 38.4 days. The arithmetic behind that small gain matters. DSO added 2.1 days and days inventory outstanding added 0.6 days. Days payable outstanding (DPO) improved by 2.9 days, to its best level since 2021, which was just enough to cover both. Settlement volumes on supply chain finance programs rose 35% over the same period. In other words, large companies held their cash cycle flat by paying their own suppliers later while their customers paid them later.
That trade has a limit. Payment terms cannot be stretched indefinitely without straining supplier relationships, and the further collection slips, the more DPO has to do just to stand still. Consistent improvement is rare: of the 1,000 companies, only 98 improved their cash conversion cycle three years in a row, nine managed five years, and two managed seven.
The pressure shows up among smaller firms as well. Xero's U.S. Small Business Insights for the September quarter, published October 29, found small businesses waited an average of 29.7 days to be paid, up slightly from 29.3 days in the June quarter, and were paid 8.6 days late on average. Waits ran to 36.8 days in Texas and 36.5 days in Illinois, against 24.0 days in Florida. Xero reads the stability as a sign that small business cash flows are not yet under pressure, but U.S. small firms already have the second-longest late payment times of the five countries it tracks.
Across the wider business-to-business market, Atradius's 2026 North American payment practices survey of more than 600 businesses in the United States, Canada and Mexico found that about seven in ten companies were hit by late payment, and overdue invoices averaged 23% of B2B receivables. U.S. firms sell 45% of their B2B volume on credit, and about one in three suppliers across the region reported reduced cash availability. "The striking finding is that payment performance and financial confidence are moving in different directions," said Silvia Ungaro, senior advisor on B2B payment trends at Atradius.
Hackett argues that companies treating this as a collections problem alone are less well positioned than those redesigning order-to-cash from end to end. Its benchmark of companies it rates as world class on AI shows the scale of the gap against peers: 138% more automated credit decisions, 134% greater digital order intake, 89% more automated cash application and 85% fewer delinquent days. "The working capital challenge is increasingly becoming an AI opportunity," said Kathleen Wiedeman, a senior director at the firm.
The common thread is that the delay is built upstream. An invoice that is late to go out, wrong when it arrives, or disputed once it lands will age no matter how hard the collections team works the phones. Hackett's point is that credit, order intake, billing, cash application and disputes have to be worked as one process.
Guide
Hackett finds that treating slow receivables as a collections problem alone leaves companies behind. This blueprint lays out how to modernize the whole order-to-cash cycle, from invoicing and payments to credit and collections.
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Guide
Receivables grew nearly twice as fast as revenue, and much of the delay starts before an invoice is overdue. This guide covers closing the gap between issuing an invoice and turning it into cash and usable financial insight.
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Guide
With late payment hitting seven in ten companies and a third of suppliers reporting less cash available, collections become a planning question. This guide is a practical starting point for modernizing planning and reporting so realistic payment timing reaches the forecast.
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