Margins squeezed as liquidity takes priority in dash for cash

Growing number of businesses are prioritising liquidity over profit margins as payment delays increase and macroeconomic pressures intensify, according to new research
 

The latest annual supplier survey from SAP Taulia, based on responses from 10,854 businesses worldwide, reveals a notable shift in financial strategy: 66% of companies say they would now accept a discount on their invoices in exchange for faster payment. 

For corporate treasurers, the findings highlight how working capital priorities are evolving as companies place greater emphasis on the speed and reliability of cash conversion.

Liquidity resilience

The survey suggests that liquidity resilience is becoming central to supply chain planning. Rather than focusing solely on protecting margins, suppliers are increasingly willing to sacrifice a portion of invoice value in order to accelerate access to cash and maintain operational stability.

Payment performance is also deteriorating. The research shows that only 37% of invoices are currently paid on time, down from 42% in 2024 and significantly lower than the 54% recorded in 2019.

 ... in today’s volatile environment, cash flow is increasingly prioritised over price  

Long wait for payment

Late payments are also creeping further beyond agreed terms, with 18% of suppliers now waiting between one and 15 days past the due date to receive payment. 

For treasury teams managing liquidity across complex supply chains, these trends reinforce the need for greater predictability in cash flows and increased use of tools such as early payment programmes and supply chain finance.

Shifting priorities

According to Peddy Hashemi, global head of customer success at SAP Taulia, the data reflects a clear shift in priorities across supplier networks.

“Across our network, we are seeing that in today’s volatile environment, cash flow is increasingly prioritised over price,” Hashemi said. “Suppliers are reassessing every available lever, from early payment programmes to alternative financing, to maintain operations and protect supply chain stability.”

 ... the decline in on-time payments is continuing  

Rising tariffs squeezing margins

External pressures are also playing a role in shaping treasury strategy. The survey finds that 25% of businesses say rising tariffs are directly squeezing profit margins, adding to the need for reliable liquidity management. 

Hashemi also noted that the decline in payment performance is becoming a critical issue for suppliers seeking financial certainty. “Our research indicates that the decline in on-time payments is continuing, which makes the need for reliable and predictable cash conversion more critical than ever,” he said.

Findings from the survey

• Liquidity outweighs margin: two-thirds of businesses are willing to offer invoice discounts in exchange for faster payment, reflecting a strategic focus on cash flow stability. 
   
• On-time payments continue to deteriorate: only 37% of invoices are paid within agreed terms, continuing a multi-year decline in payment discipline. 
   
• Payment delays are lengthening: 18% of suppliers report waiting one to 15 days beyond the due date for payment. 
   
• Tariffs are eroding margins: one in four businesses say rising tariffs are directly reducing profitability. 
   
• Financing strategies are diversifying: among companies using external finance, common tools include virtual or credit cards (22%), early payment programmes (16%), and lines of credit (16%). 
   
• A financing gap remains: one-fifth of businesses surveyed say they do not currently use external financing sources. 
   

About the author

Philip Smith is editor of The Treasurer