Скачать или смотреть Unlocking Working Capital: What B2B Payment Leaders Should Know

Middle-market companies—defined as those with annual revenues between $10 million and $1 billion—play a vital role in the global economy. Middle-market companies are responsible for over 20% of commercial spending worldwide, highlighting their substantial role in the global economy. This segment is characterized by its dynamic growth and resilience, making it a critical driver of economic activity across various regions.

In the US, the middle market represents roughly 3% of all U.S. businesses but is responsible for roughly one-third of private sector GDP and employment. To put this into perspective, if the middle market were its own country, it would be the fifth-largest economy in the world.

Despite their contributions, these businesses often face unique challenges that hinder their growth and operational efficiency. While large corporations can leverage sophisticated financial tools and small businesses often find simpler solutions, middle-market companies are frequently caught in the middle—too big for small business solutions yet not large enough to justify the complexities and costs of enterprise-level systems.

This gap creates an opportunity for banks and fintechs to develop tailored, seamless payment experiences that unlock immense value for these businesses.

By adopting UX as a guiding philosophy, financial institutions can understand and address the specific needs of middle-market companies, building long-term partnerships and gaining a long-term competitive edge.

This article explores the challenges middle market companies face and how thoughtful UX in payment processes can drive efficiency, strategic decision-making, and growth.

DSO, DPO, and what they mean for Middle Market Firms
Understanding key metrics is essential for middle-market companies. Let's take a look at two key metrics:

DSO: Days Sales Outstanding calculates the average time it takes for a company to collect payments after a sale, which is essential for maintaining liquidity and reducing reliance on external financing. Lowering DSO speeds up the cash conversion cycle.Example: SwiftParts Manufacturing (hypothetical company) sees a DSO improvement from 50 days to 40 days by introducing automated invoicing. This quicker cash collection means SwiftParts can more reliably cover monthly expenses, fund research for new part designs, and reduce dependency on short-term loans.
DPO: Days Payable Outstanding measures how long a company takes to pay suppliers, influencing cash flow. A well-managed DPO can conserve cash while preserving good relationships with vendors.Example: By extending DPO from 35 to 50 days, SwiftParts can retain cash longer, giving them flexibility to order bulk raw materials when prices are favorable. However, SwiftParts ensures that these terms are acceptable to key suppliers to maintain strong partnerships.
For payment leaders, optimizing these metrics is critical. Middle-market companies often struggle with high DSO, leading to delays in receiving payments from customers.

This delay can choke their cash flow, making it difficult to meet their own payment obligations on time, which further affects DPO. Late payments to suppliers can strain relationships and result in missed opportunities for early payment discounts.

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