Working Capital Management in 2025: New Strategies for Optimizing DSO and DPO

Working capital used to be an afterthought, something the finance team reconciled at quarter-end. In 2025, it’s become a growth lever. With persistently high interest rates, more digital payment options, and automation tools that make real-time insights possible, CFOs are rethinking how to balance cash in (receivables) and cash out (payables). The goal isn’t just to stay liquid anymore—it’s to make liquidity work harder.

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Below are five emerging or underrated strategies that leading finance teams are using to optimize Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO), turning working capital into a profit center.

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1. Dynamic Discounting and Early Pay Programs

Paying early doesn’t always sound strategic, but when managed well, it’s one of the most effective levers for improving working capital efficiency. Dynamic discounting lets you pay suppliers early in exchange for discounts, funded either by your own excess cash or through flexible financing.

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Only 27% of companies take full advantage of early payment discounts. The issue isn’t willingness; it’s operational bandwidth. Without automation, capturing discounts requires manual tracking and coordination. With an automated AP platform, you can surface and act on discount opportunities automatically, integrating supplier terms directly into your payment planning process.

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Tip: Set threshold-based rules—for instance, automatically paying suppliers early when liquidity forecasts show a surplus. You’ll invest working capital for a guaranteed return rather than sitting on idle cash.

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How Centime supports this: Payment planning, forecasting, and supplier portal tools make it easy to identify discount opportunities and execute early-pay programs efficiently.

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2. Virtual Cards and AP Monetization

The days of viewing payables as a pure cost center are over. Virtual cards have become one of the most sophisticated working capital tools for mid-market companies. Usage grew 32% last year because they help you extend DPO while earning cash back.

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By paying vendors through virtual credit cards, finance teams can generate rebates that offset automation costs and, in some cases, deliver net-positive returns. It’s effectively monetizing your AP process and turning spend into income while maintaining supplier satisfaction.

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Tip: Use a mix of ACH, check, and virtual card payments. Automate routing rules based on supplier preferences and rebate potential to maximize yield without adding manual effort.

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How Centime supports this: Virtual card payments are embedded within AP workflows, letting teams manage payment methods and cash back directly inside their ERP.

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3. Segmentation of Receivables (Customer Stratification)

Not all customers deserve the same collection strategy. Segmenting AR by customer behavior—payment speed, order size, and credit history—can dramatically improve DSO. For example, offer early payment incentives to customers who are chronically late, or tighten credit for those who consistently exceed terms.

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Manually, this kind of segmentation is nearly impossible. But with AR automation, it’s easy to deploy targeted workflows that automatically adjust reminders, escalation steps, and incentives based on customer category. The result is faster, more predictable cash inflow.

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Tip: Use collection automation not just for chasing payments, but for applying strategy. Assign “high-touch” workflows to your top 10% of overdue accounts and “self-service” reminders to low-risk, high-volume customers.

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How Centime supports this: AI-driven collection workflows and campaign management tools automate and personalize follow-ups, helping teams accelerate collections and reduce DSO.

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4. Real-Time Cash Forecasting and Liquidity Planning

Optimizing DSO and DPO is impossible without a unified view of cash flow. Best-in-class finance teams are moving from static spreadsheets to real-time cash forecasting, combining live AR and AP data to anticipate gaps or surpluses.

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According to pymnts.com, top-performing companies have a 51% shorter cash conversion cycle than bottom performers, proving that visibility pays off. With integrated forecasting and scenario planning, CFOs can simulate different payment or collection strategies and proactively rebalance liquidity.

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Tip: Review your forecast daily, not monthly. A 13-week rolling forecast, updated automatically, helps you make timely decisions—such as investing excess cash, scheduling early payments, or drawing on credit before a crunch.

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How Centime supports this: Built-in 13-week forecasting, scenario modeling, and KPI dashboards give finance leaders real-time visibility and actionable insights into liquidity.

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5. Collaborative Procurement and Finance Strategies

Procurement and finance used to operate in silos: one focused on supplier relationships, the other on cash flow. In 2025, the most agile companies are connecting these teams strategically. With shared access to liquidity data, procurement can negotiate payment terms that align with the company’s real-time cash position—longer terms when liquidity is tight, or early-pay discounts when it’s strong.

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Tip: Embed finance into procurement reviews. Use data from cash forecasting tools to guide vendor negotiations and set dynamic payment strategies.

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How Centime supports this: Unified finance automation across AP, AR, and banking ensures all stakeholders work from the same real-time insights, eliminating the disconnect between spend and cash availability.

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The New Working Capital Playbook

In 2025, optimizing working capital isn’t about squeezing suppliers or chasing customers. It’s about finding balance. Automation, embedded banking, and forecasting tools now make it possible to act on liquidity insights instantly, improving both DSO and DPO while freeing up capital for growth.

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Working capital is no longer a passive metric, but a strategic advantage. And for forward-thinking CFOs, it’s the next frontier of value creation.‍

See how an integrated view of AP, AR, and cash forecasting can unlock your working capital. Schedule a demo to explore what’s possible.

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*Centime may provide support services to FNBO, as permitted by applicable law, to facilitate the delivery of its bank products and services.

**Deposit placement through ICS is subject to the terms, conditions, and disclosures in the applicable agreements. Although deposits are placed in increments that do not exceed the FDIC standard maximum deposit insurance amount (“SMDIA”) at any one destination bank, a depositor’s balances at the institution that places deposits may exceed the SMDIA (e.g., before settlement for deposits or after settlement for withdrawals) or be uninsured (if the placing institution is not an insured bank). The depositor must make any necessary arrangements to protect such balances consistent with applicable law and must determine whether placement through ICS satisfies any restrictions on its deposits. A list identifying IntraFi network bank

Working Capital Management in 2025: New Strategies for Optimizing DSO and DPO

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