For most B2B businesses, getting paid faster isn’t just a nice-to-have — it’s a core driver of liquidity, working capital, and growth. One under-appreciated lever to improve cash flow is simply the choice of payment methods you offer customers.

Different payment methods aren’t equal — some bring cash quickly, others introduce delays that stretch out your Days Sales Outstanding (DSO) and trap cash on your balance sheet.

Here’s what the data reveals — and how smarter payment method choice can help you collect faster.

How Payment Method Mix Affects Cash Collection Speed

Not all payments clear at the same speed — and that matters when you’re tracking DSO, which measures the average time it takes to collect cash after a sale.

Fast-settling payment methods

• Credit and debit card payments typically settle within 1–3 business days.
  
• Electronic bank transfers (ACH / account-to-account) also settle rapidly — often within 1–2 business days.
  
  

These electronic and pull-based payment methods move money quickly, reducing the lag between invoice issuance and cash receipt.

In contrast…

Slow-settling payment methods

• Paper checks may take 5–7 business days or more to clear.
  
• When businesses mix multiple slow payment methods, reconciliation becomes harder and DSO tends to rise. Companies accepting four or more different payment types typically see ~15% higher DSO rates compared with businesses using more streamlined options.
  
  

Customers Pay Faster When Options Are Convenient

Recent industry surveys show that a majority of B2B buyers prefer digital payment channels because they’re easier and faster:

• Around 60% of B2B buyers prefer digital payment options over traditional manual methods — precisely because they reduce friction and help get the transaction done quickly.
  
• 66% of buyers want digital invoicing tools that streamline how invoices are delivered and paid.
  
• 93% say they prefer suppliers offering integrated digital payment options — not only for convenience, but because it makes payments faster and more predictable.
  
  

These preferences matter: if B2B buyers can use fast, digital methods, they often will — which shows up directly as shorter collection cycles for sellers.

The Payment-Method / DSO Link in Practice

When businesses prioritise faster payment methods, the improvements are measurable.

For example:

• Companies that accept predominantly electronic payments (like bank transfers and digital settlement) often maintain lower DSO benchmarks — roughly 32 days vs ~47 days for firms relying primarily on slower methods like checks.
  
• Businesses that pair digital payment options with early payment incentives (like “2/10, net 30” discounts for faster digital payments) can reduce average DSO by 7–12 days or more compared with traditional invoicing terms.
  
  

That’s a real difference: cash arriving nearly two weeks sooner turns into better liquidity and fewer overdraft days.

Why Some Methods Slow Down Your Cash Cycle

There are two main reasons DSO rises when slower payment methods dominate:

Settlement Time

Traditional methods like paper checks require manual handling and physical mail, which inherently delay settlement. By contrast, electronic bank to bank methods settle nearly in real time.

Reconciliation Complexity

When payments come through many different channels — cards, bank transfers, checks, instalments and more — accounting teams spend more time matching receipts to invoices, resolving mismatches and chasing exceptions. That administrative friction contributes directly to extended DSO.

Instalments & Credit Options: Risk vs Reward

Interestingly, offering instalment payment options or flexible financing can boost sales, but they typically come with longer settlement windows — and if buyers aren’t paying electronically or automatically, that can increase DSO.

The key is designing instalment options that align with digital collection and automation so you keep cash flow healthy while giving buyers flexibility.

Automation tools can help here by:

• Collecting instalment payments automatically
  
• Sending reminders for upcoming scheduled payments
  
• Reconciling partial payments efficiently
  
  

This makes instalment terms work for your cash flow instead of against it.

Matching Payment Methods to Buyer Behaviour

Data shows that most B2B buyers are open to faster digital methods:

• 42% of B2B buyers surveyed have experienced payment delays due to cumbersome ordering and payment processes, which suggests better options could accelerate pay cycles.
  
• About half of buyers in some markets prefer card payments precisely because they reduce the hassle of bank transfers or manual processes.
  
  

For suppliers, this means:

Giving buyers choices isn’t just customer-friendly — when those options lead to electronic and automated settlement, it reduces DSO.

Simple Steps to Shorten DSO Through Better Payment Choice

Here’s how you can make payment method choice work for cash flow:

Offer electronic bank transfers and pull-based auto-debit first

These settle faster and reduce reconciliation friction.

Support card payments and digital wallets

These clear quickly and are familiar to many buyers.

Integrate payment options into your invoicing workflow

The easier it is for customers to pay right from the invoice, the faster the payment arrives.

Use automation to eliminate manual handling

Digital invoicing and integrated payment methods reduce errors and speed up the entire order-to-cash process.

Offer instalments with automated collection

Flexibility can boost order sizes — if paired with automated payment collection, it doesn’t have to slow down cash flow.

Conclusion: Payment Choice Isn’t Cosmetic — It’s Strategic

The mix of payment methods you offer directly influences how quickly you collect cash and how predictable your receivables cycle becomes. Companies that lean into electronic, fast-settling payment options — and use automation to streamline them — routinely see:

• Lower DSO
• Faster cash inflows
• More predictable working capital

In 2026, offering multiple payment options isn’t just a convenience — it’s a competitive advantage.

If you want help expanding the payment choices you offer and automating how they’re collected, PencilPay can help you design a smoother, faster receivables workflow that reduces DSO and boosts cash flow.