Working Capital Efficiency Reflects Local Market, Industry Realities

Geography is becoming as important as strategy in how well companies manage working capital.

Different regions are improving efficiency in different ways and seeing different results.

The latest 2025/26 Growth Corporates Working Capital Index, a Visa and PYMNTS Intelligence collaboration, found that Latin America and the Caribbean now lead the world in working capital efficiency. North America has stabilized year over year, Europe is leaning on artificial intelligence, and Asia Pacific and CEMEA are balancing borrowing with cash control.

In short, working capital is critical everywhere, but the path to doing it well varies by region.

Where a company operates says nearly as much about its working capital performance as its balance sheet does.

Companies in Latin America and the Caribbean posted the highest efficiency score, even though they also face the biggest late-payment challenges. North American firms are close behind, helped by strong access to bank credit lines. Europe continues to improve by using AI and early payments, while Asia-Pacific companies are tightening cash controls and relying less on borrowing. CEMEA firms are also gaining ground by improving cash predictability and payment timing.

Across all regions, working capital has become a key source of growth funding, but local market conditions shape how companies get there.

The Working Capital Index tracks how effectively mid-sized Growth Corporates, which are typically companies with $50 million to $1 billion in annual revenue, use external tools such as loans, credit lines and commercial cards compared with the cash they generate from operations.

Index scores range from 0 to 100 and reflect factors like:

• How predictable cash flow is.
• How many suppliers are integrated into digital payment systems.
• Use of virtual cards.
• Paying suppliers early.
• How strategically companies use working capital to exploit unplanned growth opportunities.

Based on input from nearly 1,500 chief financial officers and treasurers across 23 countries, companies reported unlocking an average of $19 million a year, or about 4% of revenue, by using working capital tools more effectively. These gains come from early-payment discounts, better supplier terms and improved inventory management.

Companies already using AI for optimization see even stronger results, with benefits that are roughly two-thirds higher than those not using AI.

Companies show more predictable cash flow and greater use of bank credit lines. Most firms use at least one working capital tool and generate solid returns, with many using virtual card acceptance to speed up collections.

Efficiency improves as companies increase early payments and supplier integration. Although fewer firms are using traditional working capital solutions, Europe leads all regions in AI adoption, particularly for cash forecasting and optimization.

Companies improve efficiency by tightening cash management, even as borrowing declines. Many firms use AI and virtual card acceptance to expedite settlement and obtain improved transaction data.

This region ranks highest overall. While late payments remain a challenge, companies generate the biggest gains from working capital tools and often reinvest savings into paying suppliers faster.

Firms benefit from more predictable cash flow and increased early payments. Many are turning to flexible, on-demand working capital tools that better match changing cash cycles.

For banks, networks, FinTechs and treasury solution providers, the opportunity has shifted. Generic credit is no longer enough. Companies seek targeted working capital solutions that align with local market realities and industry cash cycles. That includes AI-driven forecasting, integrated payables and receivables, digital lending and card-based flows.

Understanding where companies sit on the working capital maturity curve, by region and sector, is becoming essential to building the next generation of products and partnerships.

Click here to create your own customized Working Capital Index report by region and industry.

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