Getting Paid Faster in B2B: How Instant Payments Help Reduce DSO and Improve Access to Capital
FPC Business Benefits of B2B Instant Payments Work Group
The Faster Payments Council’s B2B Work Group is on a mission: to raise awareness, foster adoption, and accelerate innovation around instant payments. Together, subject matter experts from across industries are shaping a future where faster, smarter financial operations become the standard in business-to-business (B2B) transactions.
At the core of this effort lies one simple goal: help businesses get paid faster. And by doing so, reducing Days Sales Outstanding (DSO), which unlocks better borrowing terms and eliminates the excessive costs associated with factoring or borrowing against accounts receivable (AR).
This blog takes a deeper look at how instant payments work, why they matter, and how your business can start benefiting now.
The Real Problem: DSO and Working Capital Strain
DSO measures the average number of days of how long it takes a company to collect on its invoices after a sale is made. It is a key indicator of financial health.
But in traditional B2B environments, DSO can stretch to 30, 60, or even 90 days—leaving companies in a constant cash crunch. The reasons are often structural: batch-based payment systems, manual reconciliation, approval bottlenecks, and legacy practices like “check is in the mail.” Other reasons include delays in the communication and processing of invoices into buyer or customer accounts payable systems. Invoices that are processed manually can introduce potential data entry errors, which cause further complications and delays when these invoices are reconciled. This is where e-invoices come into play to speed and automate the procure-to-invoice and invoice-to-payment process on the buyer or customer side of these transactions.
To compensate for excessive DSO, businesses resort to factoring (in which outstanding invoices can be financed before payment), credit lines, or early payment discounts. These tools solve short-term pain points but come at a cost: lower margins, higher debt, and increased financial complexity. The opportunity? Instant payments and e-invoices.
What Are Instant Payments?
Instant payments are transactions where funds are cleared and settled in real-time—typically within seconds—and are available 24x7x365[1]. In the U.S., the two main rails are:
RTP® Network (Real-Time Payments) by The Clearing House
FedNow® Service by the Federal Reserve
Globally, similar instant payment systems have seen massive adoption—like UPI in India, PIX in Brazil, and SEPA Instant in Europe. Stablecoins are also a rapidly emerging instant payment option, especially for cross-border B2B payments which can instantly settle between buyer and supplier.
These networks are transforming not just consumer payments, but increasingly B2B payments too. Why Instant Payments Matter for B2B
Historically, B2B payments have lagged consumer payment innovation. But the tide is turning, and for good reason. Here’s how instant payments can reduce DSO and improve access to capital:
1. Faster Access to Funds
Payments settle in seconds—not days—freeing up working capital immediately. This reduces DSO without relying on financing tools like factoring.
2. 24x7 Availability
No more waiting for banking hours, ACH windows, batch files, or manually managing checks. Suppliers or billers can receive payments at any time, including weekends and holidays, reducing end-of-month spikes and improving cash predictability. The improved timing plus corresponding reduced costs can be used to offer buyers or customers better terms to pay via instant payment.
On the buyer or customer side, invoices can be paid at the last optimal moment, just in time for early payment discounts or just before they are overdue and subject to late fees. They can also opt to automate e-invoice exchange directly into their AP system and reduce costs for current manual handling and processing of these invoices. 3. Improved Reconciliation Automation & Speed
Instant payments can carry rich remittance data, especially using data-rich ISO 20022 formats, making it easier to match incoming payments to open receivables. This cuts down on manual work and speeds up the order-to-cash process by leveraging AR straight-through processing benefits via structured ISO 20022 data for payment remittance details[2]. On the buyer or customer side, reconciliation of e-invoices against purchase order line items significantly reduces the time and potential data entry errors involved in current manual processes. Bank reconciliation is also easier and faster when instant payments immediately debit their bank account, allowing better management of cash flows which can consider uncleared check payments.
When all payments—both sent and received—are instant, everything becomes simpler and easier to manage. 4. Better Lending Terms
Faster receivables mean stronger balance sheets. Lenders look at AR turnover and DSO when assessing risk—so instant payments can directly lead to better borrowing rates or higher credit lines.
When AR is consistently collected faster, businesses show stronger cash flow and liquidity ratios. This opens the door to:
Lower interest rates
Longer credit terms
Higher loan amounts
Reduced need for collateral
Financing based on receivables becomes more efficient when lenders see a predictable, fast repayment pattern. Instant payments turn AR from a liability into an asset.
5. Elimination of Payment Delays & Improved Customer Relationships
No more “lost in the mail” excuses or “processing delays.” Instant payments bring payment certainty, by building trust in business relationships and reducing administrative overhead of chasing down funds.
Where the Value Is: B2B Use Cases
Practical use cases where instant payments offer clear advantages include:
Just-in-Time Inventory Payments: Suppliers get paid instantly when goods arrive, eliminating float while giving buyers more flexibility to hold cash longer.
On-Demand Contractor Payouts: Independent contractors or gig workers can be paid instantly upon completing work, improving satisfaction and retention.
Supplier Incentives: Suppliers or billers may offer their buyers or customers better pricing or terms in exchange for immediate payment.
Cross-Border Payments: Using instant payment methods, such as stablecoins, can speed and reduce the costs of cross-border payments[3].
How E-Invoicing and Instant Payments Work Together
E-invoicing plays a supportive role in reducing DSO. By enabling automated delivery and processing of invoices, it speeds up the approval process on the buyer’s side, making instant payment execution even easier. When combined with instant payments:
An e-invoice is generated and sent automatically from the supplier or biller to the buyer or customer.
The e-invoice serves as a payment request, providing the supplier or biller’s payment details without requiring the buyer or customer to store sensitive or potentially outdated account information in their AP system. It also reduces the risk of business email compromise fraud associated with requests to update supplier or biller account information.
The e-invoice can be delivered via instant payment networks using the ISO 20022 Request for Payment message format, or through direct supplier-to-buyer channels –including, but not limited to, legacy Electronic Data Interface (EDI) systems.
The buyer or customer approves the request and initiates the instant payment.
The supplier or biller instantly receives the payment, along with corresponding remittance details used to reconcile invoices and any credits netted into the payment.
Both parties receive confirmation—no delays, no ambiguity, and better relations.
This kind of end-to-end automation is the future of B2B commerce. Final Thoughts
B2B payments do not need to be slow or painful. Instant payments and e-invoices are already here—and businesses that adopt them are gaining a competitive edge.
By reducing DSO, improving cash flow, and boosting access to capital, instant payments and e-invoices help turn financial operations into a strategic advantage. We're shaping the future of B2B payments—and your input matters!
Help us identify the real-world barriers and opportunities for instant payments in your business. By completing this brief survey, you'll help guide the priorities of the Faster Payments Council's B2B Work Group. Take the Survey Now: https://lp.constantcontactpages.com/sv/9zHR4Em/B2BWGSurvey
Business Benefits of B2B Instant Payments Work Group
Thank you to the members of the FPC Business Benefits of B2B Instant Payments Work Group (B2BWG) who contributed to this blog.
B2B Instant Work Group Leadership Finzly Dean Nolan (Chair)
Finvix Technologies Andres Garbarini (Vice Chair) B2BWG Blog Primary Authors Finvix Technologies Andres Garbarini Vments, Inc. Steve Wasserman
B2B Work Group - Additional Members 1st Source Bank Jamie Bankert
Alogent Doug Hendricks
Euronet Worldwide Rohan Bakshi Euronet Worldwide Audrey Blackmon
Euronet Worldwide Brendyn Sullivan
Euronet Worldwide Romil Trivedi
Fintech Consulting, LLC Marcia Klingensmith
Icon Solutions Arjeh van Oijen
Pidgin Angela Murphy Serio Payments Consulting Anthony Serio, Editorial Review
SRM Larry Pruss
The Central Trust Bank Sara Kerperin
Zumigo, Inc. Yu-Ting Huang About the Business Benefits for B2B Instant Payments Work Group
Accelerate the adoption of instant payments for businesses by addressing key challenges and identifying best practices with B2B Instant Payments.
About the U.S. Faster Payments Council
The U.S. Faster Payments Council (FPC) is an industry-led membership organization whose vision is a world-class payment system where Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability. By design, the FPC encourages a diverse range of perspectives and is open to all stakeholders in the U.S. payment system. Guided by principles of fairness, inclusiveness, flexibility, and transparency, the FPC uses collaborative, problem-solving approaches to resolve the issues that are inhibiting broad faster payments adoption in this country.