The Stakes Have Changed

Fraud schemes are evolving faster than most accounts receivable teams can react. Bad actors now leverage artificial intelligence to create deepfakes and synthetic identities that bypass traditional verification systems, while faster payment rails leave less room for error. Only 8% of surveyed companies report no problems managing payment integrity.

Regulators are responding. The National Automated Clearing House Association implemented new rules in March 2026 requiring all non-consumer ACH participants to strengthen monitoring of fraudulent transactions, including standardized payment labels (payroll or purchase) to help banks spot anomalies. These rules target “credit-push” fraud, where criminals trick businesses into initiating seemingly legitimate ACH payments.

Stuck in Reactive Mode

Here’s the uncomfortable truth: 57% of middle-market firms typically discover fraud or nonclearance only after settlement—when the money is gone, and recovery is uncertain. Just 30% catch these issues early, either before transaction initiation (17%) or during authorization (13%).

The broader picture is sobering. Eighty-eight percent of businesses surveyed experienced at least one accounts receivable (AR) integrity issue in the last 12 months. Seven in 10 faced ACH returns due to invalid or closed accounts, or customer input errors that prevented clearing. Nearly as many (63%) dealt with after-delivery reversals and disputes.

Uncertainty amplifies the pain. High-uncertainty firms, those assessing greater unpredictability in critical business areas, report fraud and nonclearance costs equal to 42 basis points of revenue, double the 21 basis points incurred by low-certainty businesses.

The Verification Imperative

What separates early detectors from late? Technology that connects directly to customers’ banks to confirm, in real time, that accounts exist and belong to the right people.

Firms that detect fraud before settlement are about twice as likely to use bank account ownership verification methods as those stuck in post-settlement detection. Specifically:

• 81% of early detectors use instant bank account verification vs. 47% of post-settlement detectors

• 76% use open banking-based ownership verification vs. 35% of laggards

• 38% use micro-deposit verification vs. 24% of late detectors

Real-time identity verification and automated KYC/KYB checks also matter, though adoption gaps are smaller because these practices are more widespread. Meanwhile, basic methods like manual document review (95% adoption) and direct customer confirmation (88%) show no significant difference between early and late detectors—suggesting they’re necessary but insufficient.

Early detectors use, on average, eight verification methods compared to six for post-settlement firms. The best performers aren’t just using better tools; they have a more robust toolkit.

Upstream Controls Deliver Results

Among companies that adopted instant or real-time bank account verification in the last 12 months, 84% rate it as very or extremely effective in reducing fraud risk or improving payment integrity. Similarly, 82% of firms deploying AI or machine learning fraud scoring say it’s highly effective, as do 78% that implemented or upgraded identity verification at customer onboarding.

These are all “upstream” controls; interventions that protect against AR integrity risks long before settlement. Two of them happen before a transaction even begins.

The Cost of Integration Gaps

Integration matters. Businesses reporting that their payment verification and fraud detection tools are not well-integrated into AR workflows cite average costs of 40 basis points of annual revenue, compared with 30 to 35 basis points for the rest. Faster payments accelerate exposure: firms agreeing that advances in payment speed increased fraud exposure report AR integrity costs of 41 basis points, around 60% higher than other firms.

The research points to three actionable takeaways:

1. Shift verification upstream. Waiting until after settlement to detect fraud is a losing strategy. Invest in bank-integrated account ownership verification and real-time identity checks before authorizing payments.

2. Build a layered toolkit. Early detectors use more verification methods, not just different ones. Combine instant bank verification, AI-driven fraud scoring, and onboarding identity checks with manual reviews for high-risk transactions.

3. Integrate or pay the price. Poorly integrated verification tools cost an extra 5–10 basis points of revenue. Partner with providers who can embed controls directly into your AR workflows.

The Bottom Line

In an environment where fraud costs range from 21 to 42 basis points of revenue depending on detection timing, the choice is stark: verify early or pay later. Companies that catch fraud before settlement cut their losses in half by deploying bank-integrated verification, layered controls, and tightly integrated workflows. For treasury and AR leaders, the question isn’t whether to invest in upstream fraud prevention—it’s how quickly you can move before the next payment cycle.

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From a Press Release dated September 1, 2026, Salt Lake City, Utah

Cotiviti Retail has launched SmartP2P Alerts, a real‑time monitoring and alerting layer for procure‑to‑pay (P2P) transactions that moves error detection upstream—before payments are finalized. For suppliers selling into retailers that adopt SmartP2P, the practical implication is clear: invoicing and contract‑term discrepancies will be surfaced and resolved earlier, which should materially reduce the volume and severity of post‑audit claims and chargebacks.

SmartP2P Alerts continuously monitors P2P activity across accounts payable, pricing, allowances, and promotions, then prioritizes issues by likelihood and financial impact. The solution surfaces prioritized alerts to finance, merchandising, procurement, and vendor‑management teams, with integrated dashboards that track dollars prevented, alert performance, and time to resolution. It also includes collaborative workflows intended to streamline investigations between retailers and their suppliers.

Cotiviti frames the product as a shift from “reactive recovery” (post‑payment audits) to “proactive prevention,” leveraging AI‑enabled tools to dig into root causes and establish a continuous risk‑management cadence. In one cited grocery‑chain use case, the platform helped identify and correct roughly $10 million in promotional pricing issues over 12 months, reducing back‑end recoveries and accelerating cash flow.

Why This Matters for Suppliers and Your Order‑to‑Cash

For suppliers, the biggest change is timing and friction in dispute resolution.

• Earlier detection of invoice/contract mismatches. Discrepancies in price, promo, allowance, or terms are flagged before payment, so corrections happen pre‑audit rather than as retrospective deductions.

• Fewer surprise post‑audit claims. If retailers resolve issues upstream, the downstream audit engine has less to “recover,” which should translate into fewer large, retrospective chargebacks.

• More structured collaboration. Built‑in workflows mean suppliers are more likely to be looped into standardized, trackable resolution paths instead of ad‑hoc email chains.

• Better predictability for cash and deductions. With errors addressed earlier, suppliers can expect tighter alignment between invoiced amounts and paid amounts, improving DSO and deduction forecasting.

In short: SmartP2P Alerts doesn’t eliminate audits, but it should compress the “error window” and reduce the tail of post‑payment recoveries that suppliers often experience as volatile deductions.

What to Watch Next

• Adoption signals. Cotiviti notes it serves 30 of the world’s largest retailers and is the primary audit partner for 85% of its clients—so rollout into existing audit relationships could be swift.

• Integration depth. The extent to which SmartP2P Alerts ties into retailers’ ERPs, trade‑promotion systems, and supplier portals will determine how early and how cleanly discrepancies are resolved.

• Supplier experience. Expect retailers to push for more standardized documentation and faster response SLAs as part of the new workflows.

For order‑to‑cash and credit teams, the near‑term playbook is to map which retail customers use Cotiviti (or similar P2P integrity platforms), then align invoicing, promo, and allowance data feeds to minimize false positives and accelerate resolution when alerts do fire.

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From a Press Release dated September 1, 2026, New York, New York

KAST’s launch of a stablecoin-native “business operating account” signals that cross-border B2B payments are moving from pilot projects to production-grade rails. The implication is that treasurers, credit managers, and order-to-cash (O2C) leaders will soon be asked to evaluate stablecoin workflows alongside wires, ACH, and card networks.

KAST Business is positioned as a global, mobile-first financial platform built on stablecoin rails rather than traditional bank accounts. Key claims from the press release and early coverage:

• Stablecoin-native settlement: Accounts, cards, global transfers, cashback, and potential yield on balances all settle 24/7 across 170+ countries (availability varies by jurisdiction).

• Hybrid fiat + crypto dashboard: Companies can manage fiat virtual accounts (provided by regulated partners) alongside on-chain assets such as BTC, ETH, SOL, and supported stablecoins.

• Cross-border payroll and contractor payments: Built-in tools to hire and pay contractors across borders, settling on the same stablecoin rails.

• Yield and rewards: Access to “treasury-backed yields” and cashback on USD spending balances, with advertised returns up to around 8% APY on idle balances (variable, not guaranteed, and subject to eligibility).

• Cloud cost savings: Up to 8–10% savings on cloud infrastructure (starting with AWS), payable in stablecoins.

• Scale targets: KAST aims to onboard 1,000–5,000 active businesses by the end of 2026, after an $80 million Series A funding round in March 2026.

The company emphasizes that it is a fintech, not a bank; regulated services are provided by licensed partners, and product availability varies by country.

Why This Matters

Stablecoin rails compress settlement time, introduce new yield dynamics for idle balances, and blur the lines between AP, payroll, and vendor management. This will force credit, treasury, and O2C teams to rethink policies, controls, and system integrations.

Faster settlement, faster cash—if the rail is trusted

Stablecoin payments can settle in minutes, 24/7, without traditional batch windows or correspondent bank chains. If customers adopt stablecoin rails for invoice payment, cash application timing improves, and DSO can drop materially, as “paid” moves from T+2/3 wires to T+0/T+1 in many corridors. The benefit only materializes if credit policy, ERP, and cash-app logic can recognize and reconcile stablecoin receipts as valid payment.

Yield on balances changes the cost-of-float conversation

KAST advertises yield on USD balances sourced from short-term Treasuries and stablecoin yield, up to ~8% APY (variable, not guaranteed). For treasury teams, this raises the opportunity cost of idle accounts receivable: customers may push harder for extended terms or dynamic discounting, arguing they can “earn while they pay,” while your own treasury may be tempted to hold more working capital in yield-bearing stablecoin products, raising new counterparty, custody, and accounting questions.

Cross-border payouts blur AP and payroll

KAST explicitly targets globally distributed teams paying contractors and vendors across borders on the same rail. A single dashboard for fiat accounts, stablecoins, cards, and local payouts can simplify operations but complicates controls, approvals, and audit trails, forcing credit and risk teams to define who counts as a vendor, how contractor payouts are treated for tax and withholding, and what credit exposure exists by counterparty.

Accounting, controls, and compliance can’t be afterthoughts

Digital asset accounting guidance (e.g., ASU 2023-08 in the U.S.) already pushes companies to treat certain crypto receipts as noncash consideration and to classify immediate conversions to cash as operating cash flows. Add custody and multi-signature governance requirements, jurisdictional variability in licensing and reporting, and the need for clear policies on acceptable stablecoins, approved counterparties, conversion windows, and GL mapping, and it’s clear that stablecoin workflows must be designed with accounting, audit, and risk from day one.

The broader trend: stablecoins as parallel payments infrastructure

KAST’s launch rides a larger wave: B2B stablecoin volumes hit an estimated $226 billion in 2025, up 733% year over year, with cross-border B2B flows projected to reach $5 trillion by 2035. Meanwhile, major banks join stablecoin ventures and explore tokenized deposits. In practical terms, stablecoins are becoming an “always-on” global payments layer integrated with fiat on/off-ramps.

What to Do Next

You don’t need to adopt stablecoins tomorrow, but you do need a point of view.

• Map and pilot: Identify high-value cross-border customers in corridors where stablecoin adoption is rising, then run a controlled pilot on a subset of invoices to measure settlement time, FX cost, reconciliation effort, and dispute rates versus wires/cards.

• Update policy and governance: Define acceptable stablecoins, approved platforms, conversion requirements, yield-product risk criteria, custody and multi-signature rules, volume limits, and how stablecoin receipts affect “date paid,” aging, covenants, and cash-flow classification.

• Prepare systems and controls: Ensure your ERP and receivables tools can ingest stablecoin payment references, auto-match to invoices, post to the correct GL accounts, and embed sanctions screening, fraud checks, and approval workflows into existing AP/AR processes rather than separate crypto consoles.

The Strategic Question for Finance Leaders

KAST Business is a bet that the next generation of globally distributed companies will run their operating accounts on stablecoin rails first, and treat traditional banking as a complementary layer. For trade credit and treasury teams, the strategic question is not “Are stablecoins real?” but “When will our largest customers and vendors start asking us to support them—and are our policies, systems, and controls ready?” Companies that develop a clear, risk-aware stance now, piloting in selected corridors, updating credit and treasury policies, and aligning accounting and controls, will be better positioned to capture faster cash, lower FX friction, and new yield opportunities without compromising on risk or compliance.

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From a Press Release dated September 1, 2026, London & New York

Twenty-one of the world’s largest banks and financial institutions have committed to launch a new, bank-owned stablecoin enterprise in late 2026, with a USD-denominated stablecoin hitting the market in the first half of 2027. For treasury, credit, and order-to-cash (O2C) leaders, this is the clearest signal yet that regulated, bank-grade digital money is moving from pilot to production, and that the rails for cross-border settlement, receivables financing, and working-capital optimization are about to change.

Scope, Timeline, and Participants

• What’s being built: A new company, still to be determined, will issue a 1:1 reserve-backed stablecoin designed for wholesale, institutional, and retail use cases such as cross-border payments and digital asset settlements.

• Geography and currency roadmap: Initial focus is on a USD stablecoin, with a stated ambition to expand into other G7 currencies, prioritizing a EUR offering.

• Timeline: Form the company in late 2026 (subject to closing conditions); target go-to-market in the first half of 2027.

• Compliance posture: The initiative intends to be GENIUS Act–compliant in the U.S. and MiCA-compliant in the EU, as applicable—aligning with 2026’s tightened frameworks for payment stablecoins.

• Participating institutions span North America, Europe, East Asia, the Middle East, and Africa, including: Bank of America, Capital One, Citi, Fidelity Investments, Goldman Sachs, PNC, Scotiabank, TD, Wells Fargo, WisdomTree; Santander, BBVA, Commerzbank, Crédit Agricole, Deutsche Bank, Lloyds, Rabobank, UBS; MUFG Bank; Sirius International Holding; and Standard Bank.

Why This Matters for Trade Credit, Treasury, and O2C

This consortium directly addresses the three constraints that have kept corporate finance teams cautious about blockchain-based settlement: trust, compliance, and scale.

• Trust and governance: Bank-grade compliance, strong governance, and institutional risk management are baked into the design—reducing counterparty and operational risk relative to non-bank issuers.

• Regulatory clarity: With MiCA’s transitional period ended (full authorization now mandatory) and the GENIUS Act bringing stablecoin issuers under AML/sanctions/KYC regimes, a bank-led vehicle lowers legal and audit friction for corporates.

• Use-case fit: Cross-border payments and digital asset settlements are the stated initial targets—precisely where O2C teams face the highest costs, longest float, and most manual reconciliation.

For credit and collections leaders, the practical upside is narrower days sales outstanding (DSO), fewer payment exceptions, and cleaner cash application, especially when paired with tokenized invoices or receivables on the same or interoperable networks.

The Order-to-Cash Case

A bank-owned stablecoin changes the economics of three O2C pain points:

1. Cross-border settlement speed and cost: Traditional wires and correspondent banking add days of float and opaque fees. A USD stablecoin settling on public or permissioned blockchains can compress settlement to minutes or hours, improving liquidity visibility and reducing trapped cash.

2. Reconciliation and exceptions: When payment instructions, remittance data, and settlement occur on the same programmable layer, auto-cash application rates rise while deduction volume falls. That’s a direct hit to collector workload and unapplied cash balances.

3. Receivables financing and working capital: Tokenized receivables are already moving into production (e.g., POSCO International’s pilot on Avalanche), showing how invoices can be represented as transferable tokens with embedded data and controls. A widely distributed, bank-backed stablecoin creates a natural settlement asset for these instruments, potentially lowering discount rates and expanding buyer/supplier participation.

How This Contrasts with the State Bank-Owned Blockchain Network

The 21-bank stablecoin enterprise and the BankChain Alliance (39 state banking associations representing 3,283 U.S. banks) are complementary but distinct plays.

In short: the 21-bank venture supplies the currency instrument (a regulated, bank-backed stablecoin), while BankChain supplies the domestic rail (a permissioned network where tokenized deposits and stablecoins can move with automated settlement). For O2C, that points to a future where cross-border invoices settle in the consortium’s stablecoin, while domestic flows increasingly run on tokenized deposits over a bank-owned network—both with richer data and faster finality than today’s wires and ACH.

The Bottom Line

The 21-bank stablecoin enterprise turns a long-running “what if” into a dated roadmap: form the company in late 2026, launch a USD token in early 2027, and expand into G7 currencies thereafter. Alongside the U.S. BankChain effort, this signals a dual-track future featuring global stablecoin settlement plus domestic tokenized-deposit rails where trade credit and O2C teams can capture lower float, fewer exceptions, and better working-capital outcomes by redesigning workflows.

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To get a better feel for these dynamics, we polled 123 practitioners to find out how credit organizations communicate with Sales when customers are placed on credit hold. We asked:

The results show:

• 51% say communication happens when a customer is past due and all orders are held.

• 31% communicate when an order is placed on credit hold.

• Only 1% say Sales are not told about the credit hold.

• 17% selected “Other,” highlighting that communication practices can vary significantly across organizations.

The findings, drawn from experienced professionals in large enterprises, underscore the importance of cross-functional collaboration in managing customer credit risk. The survey illustrates that communication between Credit and Sales is generally well established, with most organizations informing Sales when accounts become past due or are placed on credit hold. In contrast to this proactive attitude, when you wait to inform Sales that an account has been placed on hold, you are being reactive. It is better that Sales be informed ahead of time of a customer’s past-due status even before there is an order. This prevents Sales from being blindsided, and allows them to at least warn the customer that new orders will be held.

The Implications of Your Credit Hold Policy

Credit hold communication is not simply an operational process. It can directly influence how effectively Credit and Sales work together to manage customer risk while protecting revenue.

Michael Johnson, Business Development Representative at Growfin, responded to the survey, saying, “I think the real goal isn’t deciding when to notify sales, but making sure every customer-facing team has the same context at the same time. A shared view of collections, credit status, PTPs, disputes, payment activities across teams, and even surfaced in systems like Salesforce and our ERPs, makes it much easier to collaborate.”

Visibility is more valuable than isolated notifications. When Sales, Credit, Collections, and Customer Service operate from a shared, real-time view of customer activity, credit exposure, disputes, PTPs, and payment status—they can make faster, more informed decisions. That alignment not only improves collaboration but also enhances the customer experience and accelerates cash flow.

Commenting on the survey, Saurabh Kesarwani, Deputy General Manager & Zonal Head - West at City Union Bank Ltd., noted that “The alignment between Sales and Credit is crucial for maintaining customer trust and ensuring operational efficiency. Real-time communication can mitigate risks and enhance the customer experience, ultimately impacting cash flow. Organizations should prioritize a proactive approach to keep Sales informed, fostering collaboration that supports strategic objectives.”

The Bottom Line

The strongest organizations treat Sales and Credit as strategic partners, not separate functions. Real-time communication enables smarter decisions, reduces unnecessary friction, accelerates order processing, and strengthens customer relationships.
When both teams are aligned around profitable growth rather than competing priorities, businesses improve cash flow while delivering a better customer experience.

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McMillan’s core argument is that money and credit should be separated. In today’s system, banks create deposits when they lend, combining payment capability and credit risk on their balance sheets. McMillan argues that this structure creates instability: money is expected to be safe and immediately available, while loans are long-term and inherently risky.

His alternative is straightforward in principle:

• Digital money should be safe, reliable, and fully backed.

• Payments should move quickly and at low cost.

• Credit should remain available, but lenders and investors, not depositors or taxpayers, should explicitly bear the associated risk.

Relevance to Order-to-Cash

The book’s biggest value for O2C leaders is its view that payment, credit, and financing no longer need to be delivered by the same institution. That shift is already visible in the modern receivables environment. Companies increasingly combine ERP platforms, payment providers, credit-data services, trade-credit insurance, collection automation, supply-chain finance, receivables finance, and banking partners to manage working capital. The future O2C stack is likely to be less dependent on a single bank and more dependent on connected data and specialized providers.

For credit and collections teams, the implication is clear: accounts receivable should be managed as a strategic asset, not simply as an accounting balance. Better integration among invoice data, disputes, payment behavior, customer credit profiles, and cash forecasting can improve both liquidity and risk control.

A Trade Credit Perspective

Trade credit is effectively decentralized business lending. Every decision to offer credit terms is a decision to finance a customer’s purchase. McMillan’s argument highlights the need for stronger visibility into:

• The real cost of extending payment terms.

• Customer payment patterns and delinquency risk.

• Disputes, deductions, and barriers to collection.

• Receivables concentration risk.

• The financing value of the receivables portfolio.

Digital tools can make these decisions faster and more data-driven. But faster underwriting does not automatically mean better underwriting. More data can improve credit decisions, yet it can also create false confidence if companies lack strong policies, governance, and human oversight.

Purchase the Book

One Caveat

The book is strongest as a critique of traditional banking, but less complete as a practical replacement model. Banks provide more than lending and payments: they offer liquidity management, trade finance, foreign exchange, fraud controls, relationship support, and financing during periods of stress.

That does not weaken the book’s central insight. It simply means O2C and treasury leaders should view the book as a strategic challenge rather than a near-term operating blueprint.

The Bottom Line

The End of Banking is a worthwhile read for finance leaders looking beyond incremental process improvements. Its message is that the future of finance will increasingly separate payment execution, credit assessment, financing, and risk management, and then connect them through digital systems and data.

For O2C executives, the practical takeaway is to build an integrated working-capital strategy: link credit policy, invoicing, collections, disputes, cash application, and financing decisions around a shared view of customer payment risk and expected cash flow.

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Economic conditions rarely move in straight lines. Periods of stability are often followed by periods of adjustment as markets respond to changing financial realities. Over the past year, higher borrowing costs, rising operating expenses, and tighter credit conditions have gradually reshaped the financial landscape for many businesses.

While the overall economy has remained relatively resilient, signs of financial pressure are beginning to emerge across several sectors. Credit professionals are paying closer attention to payment trends, tightening internal credit policies, and monitoring accounts more carefully for early indications of financial stress.

For companies that rely on professional collection services and legal forwarding networks such as American Lawyers Quarterly, these developments reinforce a long-standing principle of commercial credit management: early awareness and timely action often provide the best opportunity for successful recovery.

In this issue, we examine several developments affecting today’s commercial credit environment, including interest rate pressures, industry consolidation, the growing importance of reliable credit information, and the value of proactive collection strategies.

Early Warning Signs of Financial Distress

Financial Problems Rarely Appear Overnight

Most businesses do not move suddenly from financial stability to insolvency. In many cases, warning signs appear gradually—sometimes weeks or months before more serious financial problems become visible.

Common indicators may include slower payment patterns, increased disputes over invoices, reduced communication from customers, requests for extended payment terms, or sudden changes in purchasing activity. In some situations, a company that once communicated regularly may become increasingly difficult to reach.

For credit managers and collection professionals, recognizing these early signals can be critical. The earlier a potential problem account is identified, the more options creditors often have available to protect their position and improve recovery potential.

Industry Consolidation Continues

Adjusting to Higher Costs

Several industries—including retail, healthcare services, transportation, and manufacturing—continue to experience consolidation as companies adjust to rising costs and changing market conditions. Mergers, acquisitions, restructurings, and operational consolidations have become increasingly common as businesses seek greater efficiency, scale, and financial flexibility.

While consolidation can strengthen companies over the long term, transition periods often create uncertainty for suppliers and creditors. Payment priorities may shift as organizations restructure operations, integrate systems, or renegotiate financing arrangements. In these situations, creditors frequently benefit from access to experienced commercial collection counsel familiar with local laws, court procedures, and recovery practices in multiple jurisdictions—a service that national legal forwarding networks such as ALQ have facilitated for generations.

The Value of Reliable Credit Information

Information Remains a Key Risk Tool

In uncertain financial environments, reliable credit information becomes even more valuable. Payment histories, commercial credit reports, public filings, and industry data can provide important insight into a company’s financial condition and payment behavior. Even small changes in payment patterns may offer useful clues regarding emerging financial stress.

Access to timely and accurate information allows creditors to make more informed decisions regarding credit limits, payment terms, account monitoring, and collection strategy. Even with strong credit practices, however, some accounts inevitably require outside collection or legal action. When that occurs, the ability to refer matters quickly to qualified counsel in the appropriate jurisdiction remains an important component of the commercial credit process.

Credit Policies Becoming More Important

During periods of economic uncertainty, strong and consistent credit policies become increasingly important. Clear credit limits, consistent payment terms, prompt follow-up on delinquent accounts, and active monitoring of accounts receivable can help reduce exposure to deteriorating credit situations.

Many companies are also increasing the frequency of internal credit reviews for existing customers rather than relying solely on reviews conducted at the time an account is opened. Ongoing monitoring often provides an opportunity to identify problems before balances become unmanageable. In today’s environment, disciplined credit management is not simply an accounting function—it is an important part of overall risk management.

Collections and Customer Relationships

One of the ongoing challenges faced by creditors is balancing collection efforts with long-term customer relationships. In many situations, early communication can help resolve payment issues before they escalate into more serious disputes or legal proceedings. Open dialogue between creditor and debtor may lead to workable payment arrangements that preserve both cash flow and ongoing business relationships

At the same time, delaying action too long can sometimes reduce recovery opportunities. Successful credit management often involves finding the right balance between patience and timely intervention.

Source: This article was first published July 22, 2026, in The Eagle, which is published by American Lawyers Company (ALQ).

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From a Press Release dated August 25, 2026

At first glance, the BankChain Alliance looks like a banking infrastructure story. For order-to-cash leaders, it is a working-capital story.

On August 25, 39 state bankers’ associations announced an effort to create an industry-owned, industry-designed, and industry-governed blockchain network. The initiative could support tokenized deposits, stablecoins, smart payments and automated settlement, with a target launch in 2027. It is not yet an operating payments network, and the alliance is still selecting its technology partner.

That distinction matters. BankChain is not something treasury or accounts receivable teams can connect to tomorrow. But it signals that the infrastructure underpinning B2B payments may be entering a new phase; one in which money, transaction data and payment instructions can move together. For O2C leaders, that could change how companies release orders, collect receivables, reconcile cash and manage liquidity.

Why This Is an O2C Story

Order-to-cash is often described as a sequence:

1. A customer places an order.

2. The supplier evaluates credit.

3. Goods or services are delivered.

4. An invoice is issued.

5. The customer initiates payment.

6. The supplier receives, identifies, and applies the cash.

7. Exceptions, disputes, and short pays are resolved.

But most of the friction is between those steps. Credit information sits in one system. Shipment data sits in another. The invoice travels through an ERP. Payment instructions move across banking rails. Remittance information may arrive by email, portal, or spreadsheet. Cash application teams then try to determine which open item the payment belongs to.

A shared banking network will not eliminate every problem in that chain. It could, however, reduce the number of handoffs between commercial activity and settlement.

The key concept is not simply “blockchain.” It is the possibility of programmable bank money moving across a common network with richer transaction data and defined business rules.

That could give O2C teams a new operating model:

• A payment could be released when a delivery milestone is confirmed.

• A buyer could authorize payment against an approved invoice without a separate manual instruction.

• A supplier could receive structured remittance information with the funds.

• An ERP could post a transaction based on a verifiable settlement event rather than a bank statement received later.

• A bank could support automated settlement while preserving the regulated deposit relationship.

BankChain’s public materials emphasize smart payment tools, tokenized deposits, stablecoins and automated settlement, while also promising interoperability with other networks. The breadth of that menu is intentional—but it also means the final product and its usefulness to corporate finance remain unresolved.

What’s the Payoff

The strongest case for a banking blockchain network is that it could make payments more data-rich, conditional and coordinated.

These are potential benefits, not promised capabilities. The network’s value will depend on standards, bank participation, ERP integration and whether companies can use it without rebuilding their finance architecture.

The Clearing House’s separate bank-led initiative illustrates the direction of travel. Its proposed infrastructure is designed to support on-chain clearing and settlement of tokenized deposits, richer transaction data, automated workflows and connectivity to existing rails such as RTP and CHIPS. It also identifies use cases including programmable treasury operations, real-time liquidity management, cross-border payments and automated financial workflows.

BankChain could become a more distributed alternative to that model. The Clearing House initiative is owned by 25 of the country’s largest financial institutions, while BankChain is being organized through state banking associations to give banks of different sizes a stake in the infrastructure. The Defiant reported that the 39 associations represent 3,283 banks with $21.8 trillion in assets, although individual member banks have not automatically committed to join the network.

For a regional bank serving middle-market businesses, that governance question is significant. A bank-owned network may offer access to modern payment capabilities without forcing every institution to depend on a large-bank consortium, a core processor or a crypto-native company.

For a corporate treasury team, the practical question is simpler: Will the network allow our bank to provide the same speed, data quality and programmability that our largest banking partners can offer?

Tokenized Deposits Versus Stablecoins

The debate is often framed as a choice between stablecoins and tokenized deposits. For B2B finance, the more useful question is: What kind of money best fits the transaction, accounting policy, risk appetite and banking relationship?

Tokenized deposits are digital representations of commercial-bank deposits. They preserve the connection to a bank balance sheet and could fit naturally into existing treasury, compliance and credit processes.

Stablecoins are generally designed to be more portable across platforms and potentially more useful for cross-border transactions where custody is maintained by the stablecoin owner. That portability may be attractive to customers, but it can create additional questions around issuer exposure, redemption rights, accounting treatment and operational control.

The accounting discussion is already becoming relevant. In August 2026, the Financial Accounting Standards Board proposed guidance and examples for assessing whether certain digital assets may qualify as cash equivalents. The proposed approach focuses on three attributes: an on-demand contractual redemption right, a direct right to redeem with the issuer for a known amount of cash, and segregated reserve assets held at least one-to-one in short-term, highly liquid assets.

The proposal does not make the guidance final, and it does not treat secondary-market liquidity as a substitute for direct redemption. That matters to corporate finance because “can we sell it?” is not always the same as “is it cash for accounting and liquidity purposes?”

A tokenized deposit may have a more familiar relationship to the company’s bank account, cash controls and reconciliation processes. But O2C leaders should not assume that every bank-issued digital instrument will receive identical accounting, legal or operational treatment. Treasury, controllership, legal and auditors will need to evaluate the specific product.

The likely winner will not be the instrument with the most impressive technical architecture. It will be the one that combines:

• Reliable settlement.

• Clear ownership and redemption rights.

• Strong identity and compliance controls.

• Useful payment data.

• Interoperability across banks.

• Straightforward ERP and treasury integration.

• Predictable accounting and reporting treatment.

The Catch: Money Gets Faster

The same infrastructure that could accelerate collections could also make bank deposits more mobile. A Dallas Federal Reserve analysis estimated that a 10% increase in depositors’ sensitivity to interest rates could reduce U.S. banks’ capacity to hold long-term interest-rate risk by approximately $700 billion. A separate scenario estimated that a 10% reduction in the weighted average life of deposits could reduce maturity-transformation capacity by about $580 billion. These are scenario estimates, not forecasts, but they highlight a structural concern: faster movement may make deposits less “sticky.”

That creates an important second-order issue for B2B finance. If tokenized deposits and automated agents make it easy for companies to move balances to the highest-yielding account, banks may need to rely more heavily on term funding or wholesale markets. The cost of credit could rise. Credit lines could become more actively priced. Banks may become more cautious about funding long-duration assets, including working-capital facilities, commercial loans and trade finance.

In other words, a payment network can improve the speed of cash movement while weakening some of the funding economics that support bank lending. For O2C leaders, this means the conversation should not stop at faster settlement. Ask how the new infrastructure could affect:

• Revolving credit facilities.

• Receivables financing and factoring.

• Customer credit limits.

• Supplier-finance programs.

• Deposit-linked pricing.

• Intraday liquidity requirements.

• Counterparty and bank-concentration risk.

The future may bring faster payments and more dynamic banking relationships simultaneously.

The Bottom Line

BankChain matters to O2C leaders because it could move payment infrastructure closer to the commercial transaction itself. Instead of asking only whether an invoice has been paid, finance teams may eventually be able to verify that the right party authorized the right payment under the right conditions, with settlement occurring on a shared, trusted network.

Such a network will not simply make money move faster. It will make the entire payment-to-reconciliation process more reliable without undermining the banking relationships that finance the economy.

That is the real O2C question: not whether blockchain is coming, but whether bank-owned programmable money can turn payment capture and cash management into a more integrated part of the commercial transaction.

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For credit, collections, billing, and cash application teams, the message is not that AI will replace the O2C process. Rather, the near-term opportunity is to use it to improve the work those teams already perform: reduce manual effort, increase accuracy, automate repetitive tasks, and give finance professionals more capacity to manage exceptions, customer relationships, and working-capital decisions.

AR Ranks Near the Top Today

Among the financial processes where organizations currently use AI, accounts receivable ranks third, cited by 49% of finance leaders. It trails only budgeting and financial planning at 56% and financial reporting at 54%. Accounts payable follows at 47%, while cash flow management ranks sixth at 44%.

The ranking matters because AR is fundamentally an operating workflow. It contains repeatable, data-rich tasks such as invoice creation and delivery, payment matching, collections outreach, dispute triage, cash forecasting inputs, and customer account follow-up that are well-suited to AI-assisted automation and prioritization.

The report characterizes AI adoption as strongest in internal finance workflows, including AR and AP, rather than in more complex processes involving external parties. That distinction is relevant for O2C leaders: the first value creation may come less from fully autonomous customer interaction and more from improving the internal work that supports customer-facing collections and receivables management.

The AI Goals Behind O2C Adoption

The survey’s top five goals for AI adoption align closely with long-standing AR and collections priorities. Finance leaders are focused on making existing processes faster, more accurate, less labor-intensive, and less costly—not merely deploying technology for novelty’s sake.

For an O2C organization, these goals translate into practical use cases:

• Accuracy and fewer errors: AI can help identify incomplete invoice data, potential duplicate records, payment-to-invoice matching exceptions, and anomalies that could delay collection or create customer friction.

• Efficiency and productivity: Teams can reduce time spent preparing collection worklists, researching account histories, drafting routine correspondence, and assembling reporting.

• Routine-task automation: Invoice reminders, follow-up sequencing, payment-status updates, deduction categorization, and low-risk cash-application suggestions are potential areas for automation with human oversight.

• Cost reduction: Reducing manual touches per invoice or per customer account can lower collection costs without necessarily reducing the quality of customer engagement.

• Compliance: A controlled AI environment can support more consistent documentation, approvals, audit trails, and policy adherence—especially important in credit, collections, payment processing, and customer-data handling.

The survey also reports that financial operations employees save an average of 21 hours per week through AI tools, while 75% of finance leaders say AI use has produced a measurable decrease in human error. These are aggregate finance findings rather than AR-specific outcomes, but they reinforce the operational case for applying AI to high-volume receivables work.

AR and Cash Flow Outlook

Finance leaders expect AI to have an even greater role in AR and cash flow management during the next three years. For accounts receivable, 43% expect AI to play a major role and another 20% expect it to completely drive the process. That’s a combined 63%. Cash flow management receives the same overall 63% expectation, although its split is 40% for a major role and 23% for completely driving the process.

This shared 63% result is strategically important. AR is not only a back-office efficiency target; it is a primary source of data and operational leverage for cash flow management. Better invoice accuracy, earlier identification of collection risk, faster cash application, and more reliable payment-behavior insights can all improve the quality and timeliness of cash forecasts.

Still, “completely drive” should be interpreted cautiously in an O2C context. Receivables teams manage exceptions, commercial relationships, disputes, credit risk, and customer experience: not just transactions. The practical model is likely to be AI handling more of the repetitive analysis and workflow orchestration while professionals retain responsibility for policy decisions, escalations, negotiations, and exceptions.:

Five Barriers to Address

The survey identifies five leading obstacles to AI adoption. For AR and O2C leaders, each one has direct implications for program design and vendor selection.

Cost of implementation and data security concerns, tied at 43%, are the two most frequently cited barriers. In AR, the cost question should extend beyond the software subscription: finance leaders need to account for implementation, integration, process redesign, training, governance, ongoing model monitoring, and the effort required to clean and maintain underlying receivables data.

Security is especially central because O2C data may include customer contact information, bank and payment details, invoice records, credit information, commercial terms, and dispute documentation. AI adoption should therefore be paired with clear policies on approved tools, data access, retention, auditability, human review, and the use of sensitive customer information.

Integration with existing systems, cited by 37%, is equally consequential. An AI capability that cannot reliably connect to the ERP, billing platform, CRM, payment portal, collections system, and banking or lockbox data will create another disconnected workflow rather than improve O2C performance. The strongest use cases are likely to be those embedded in, or tightly integrated with, the systems where AR teams already work.

Data quality concerns, at 36%, point to a foundational issue. Inconsistent customer master data, unclear payment terms, inaccurate invoice status, fragmented remittance information, and poorly coded disputes limit both automation and predictive insight. Before deploying AI at scale, organizations should establish data ownership and define the quality standards required for receivables workflows.

Finally, 30% cite insufficient end-user expertise. Adoption will depend on more than selecting a platform. Credit and collections professionals need training on how to interpret AI-generated recommendations, recognize weak or incomplete outputs, manage exceptions, and preserve the judgment and customer sensitivity that effective collections requires.

The O2C Takeaway

AI’s value in accounts receivable will come from helping teams collect smarter, not simply collect faster. The survey shows AR is already a leading finance use case, and both AR and cash flow management are expected to see significantly expanded AI involvement over the next three years.

For finance executives, the near-term priority is to start with measurable O2C problems: manual cash application, invoice exceptions, collection prioritization, payment-promise tracking, dispute workflow, or forecast inputs. Then build the necessary foundation around clean data, ERP integration, security controls, human review, and user training.

The opportunity is substantial, but the operating discipline matters just as much as the technology. In order-to-cash, the winners will be the organizations that use AI to improve accuracy, speed, visibility, and decision-making without compromising customer relationships, financial controls, or trust.

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It is difficult to compile a count of Receiverships, since these are typically handled at the State level rather than in the Federal Courts. Trade Creditors often assume a company going into receivership is uncommon, but S&P Global reports that 10 insurers were put into Receivership in 2025: 8 for liquidation and 2 for rehabilitation. In 2023, 13 insurers entered Receivership and then 5 more in 2024, so it is not an infrequent occurrence.

The objective of this article is to explain the differences and provide a high level overview, so you will be better able to deal with customers who enter the Receivership process.

Bankruptcy: Most Credit Pros Know the Playbook

Bankruptcy is governed principally by the U.S. Bankruptcy Code and administered in federal bankruptcy court. In a Chapter 11 case, a company may reorganize, sell its assets, or conduct an orderly liquidation. Existing management usually remains in place as the debtor in possession, operating under statutory obligations and court oversight. In Chapter 7, the company is liquidated by the court-appointed Trustee.

The Bankruptcy Code also provides a relatively standardized framework for claims, creditor priorities, executory contracts, asset sales and distributions. For trade creditors, a bankruptcy proceeding creates a familiar set of issues you need to assess quickly, including potential administrative-expense claims for qualifying goods received within 20 days before the filing, reclamation rights, setoff, security interests and exposure to preference claims.

When a financially distressed customer enters bankruptcy, most credit professionals know the initial playbook:

• Halt collection activity

• Identify the chapter

• Assess open receivables and orders

• Protect available creditor rights.

A Receivership Has Differences

When a customer enters a Receivership, the process demands the same urgency, but not the same assumptions. Both Bankruptcy and Receivership proceedings are signals that your customer is experiencing serious distress, potential operational disruption, and reduced recovery prospects. Yet bankruptcy and receivership operate under materially different legal structures. For credit managers, treasurers and CFOs, treating a receivership as “bankruptcy-lite” can lead to costly mistakes, such as unauthorized collection activity, shipments released on weak terms, missed claims deadlines or a failure to preserve priority rights.

Receivership is Managed Differently

Receivership is more variable. State law often governs, although federal courts may also appoint receivers. The operational difference between bankruptcy and receivership is significant: Chapter 11 generally leaves management in control. Receivership may shift authority to a court-appointed third party overnight by authorizing an independent receiver to control specified assets, or, in some cases, nearly all business operations.

Receiverships commonly arise in secured-lender enforcement

This is particularly true:

• Where collateral is deteriorating

• Cash management by current management is questionable

• Fraud is alleged

• A lender believes independent oversight is needed to preserve value

The receiver is typically authorized to take over management control of the business. This can include:

• Taking possession of property

• Operating the business

• Investigating questionable transactions

• Collecting receivables

• Preserving or selling assets

What a Creditor Can and Cannot Do

Do not guess about pursuing collection activity. In bankruptcy, the automatic stay under Section 362 generally bars efforts to collect prepetition debts, enforce judgments, repossess property, or to continue related litigation. A receivership does not automatically trigger the same nationwide statutory stay.

That does not mean a supplier is automatically free to continue its normal collection process. A receivership court may enter injunctions or other restrictions that limit lawsuits, enforcement actions, repossessions, or interference with receivership property. The scope can depend on the jurisdiction, the order, and the company assets involved.

What to do first

The first action you should take after learning of a receivership is to obtain and review the court’s appointment order. It is not simply a matter of giving collections a “stop” or “go” instruction. If your company has material exposure, collateral, setoff rights, goods in transit, or active enforcement activity, it is advisable to engage qualified counsel familiar with the receivership process and requirements.

Protect Your Company’s Liquidity and Future Sales

Receivership creates pivotal credit decisions about whether and how your company can continue doing business with a customer in receivership.

Get the protective wheels in motion:

• Separate all pre-receivership receivables from post-appointment transactions.

• Verify who has purchasing authority before releasing goods or accepting orders.

• Determine if the receiver has approved the transaction and what payment commitment applies. A purchase order from former management may no longer provide adequate assurance.

• Consider mitigating future risks by requiring cash in advance, a deposit, credit card payment, a letter of credit, or other protected terms where commercially feasible.

• Confirm the treatment of goods already in transit, consigned inventory, and equipment on the customer’s premises.

• Immediately review any special rights your company has in place with the debtor company. For example: Liens, personal or corporate guarantees, consignment arrangements, credit insurance, reclamation possibilities and contractual setoff rights.

• Preserve supporting documents: invoices, purchase orders, bills of lading, proof of delivery, contracts, payment history and customer correspondence.

Beware: Claims May Be Less Predictable

Unlike bankruptcy, receivership does not offer a single, comprehensive federal claims regime. The receiver or court may establish a claims process and a bar date, but the procedures vary considerably. Missing a deadline or submitting incomplete support can impair recovery.

Receivership also does not follow a bankruptcy’s federal preference framework. Regardless, a receiver may pursue fraudulent transfers, insider transactions, or other avoidance theories under applicable law. Also be aware that a receivership can be followed by a bankruptcy filing. This opens the opportunity for a change in restrictions, priorities, and your recovery strategy.

The Bottom Line

Receivership is not simply another form of federal bankruptcy. Because rules, authority, and creditor restrictions are defined primarily by the specific court appointment order rather than a uniform federal statute. Trade creditors must never rely on standard bankruptcy assumptions. Protecting your balance sheet requires moving quickly to understand who controls the business, what collection steps are legally permissible, and how future transactions will be funded.

This article is a brief overview of these two very different processes, not intended as legal advice. When confronted with a customer entering either Bankruptcy, or Receivership, always consult qualified legal counsel aware of the regulatory nuances and ever-changing court rulings.

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Based on two Press Releases dated August 19, 2026, San Mateo, California (Press Release 1 and Press Release 2)

Xero’s recent press releases may be aimed primarily at small business executives and accountants, but they carry implications for order-to-cash leaders well beyond the small-business segment. The announcements combine AI-driven ledger automation with expanded payment capabilities, including faster payment options, a developer-facing payments API, and tools designed to improve cash-flow visibility.

The most important development for O2C is not any individual feature. It is Xero’s attempt to connect previously separate activities, such as document collection, reconciliation, payment follow-up, cash-flow planning, and payment execution, inside one operating environment.

From Transaction Processing to Exception Management

Xero says its JAX agentic platform will identify unreconciled items, duplicate transactions, missing documents, and anomalies, then help customers resolve them while keeping the ledger updated in real time. Its Auto Bank Reconciliation capability is also being extended to handle more complex cases, including splitting a single payment across sales and fees.

For O2C teams, this signals a continuing shift away from manually processing every transaction or using a bolt-on solution to automate the process. The future operating model is more likely to involve these activities within the system of record:

• Automated matching for high-confidence transactions.

• Human review of exceptions, disputed items, and unusual cash activity.

• Clear explanations of why a transaction was matched.

• Continuous updates to the ledger rather than periodic reconciliation.

• Earlier identification of data problems that could delay cash application or distort receivables reporting.

That distinction matters. Cash application is often treated as an accounting task, but it directly affects collections performance. An unapplied payment can make a customer appear delinquent, trigger unnecessary collection activity, obscure available credit, or delay the release of an order. If AI can identify and explain routine matches while escalating exceptions, O2C teams can devote more time to resolving the items that actually affect cash flow and customer relationships.

The key question for finance leaders will be whether these capabilities can be trusted at scale. Automation should not simply reduce keystrokes; it should improve the quality and timeliness of receivables data. Xero’s emphasis on explaining each match and keeping customers in control is therefore relevant to the governance requirements of any AI-enabled cash application process.

Collections Become More Event-Driven

The first release specifically highlights new “Payment follow-ups” and cash-flow actions powered by JAX. Xero says these capabilities are intended to facilitate faster money coming in, identify potential cash-flow gaps before they arise, and help businesses create a plan to remain in the black.

This suggests a more proactive approach to collections. Traditional accounts receivable workflows often rely on fixed rules:

1. Issue the invoice.

2. Wait until the due date.

3. Send a reminder.

4. Escalate when the account becomes overdue.

An AI-enabled workflow can potentially respond to more meaningful signals, such as:

• A customer’s payment pattern changing.

• An invoice remaining unmatched to a bank transaction.

• A missing document preventing reconciliation.

• A projected cash shortfall approaching.

• An unusual movement in receivables or operating cash.

• A payment being initiated but not yet settled.

For O2C leaders, the opportunity is to move from calendar-based chasing to prioritized, context-based intervention. The most valuable reminder is not necessarily the one sent on day 30; it may be the message triggered when a normally reliable customer deviates from its established payment behavior or when an unresolved exception threatens a near-term cash position.

However, automation should not turn collections into indiscriminate outreach. Customer segmentation, dispute status, credit exposure, relationship history, and promised-payment commitments still require policy judgment. The best use of AI is to recommend the next action, assemble the relevant context, and handle approved routine communications, not remove accountability from the process.

Payment Rails Become Part of the O2C Strategy

Xero’s second release describes Melio’s expanded payment capabilities, including ACH, real-time payments, paper checks, domestic and international wires, and virtual cards through its Melio API. The company also says its payment infrastructure handles execution, compliance, risk, and delivery, while payees do not need to onboard onto Melio to receive payment.

Although the announcement discusses B2B payouts, the implications extend to receivables and working capital. Payment infrastructure increasingly influences how quickly and reliably money moves through the entire financial system. O2C leaders should view payment rails as a strategic component of the cash-conversion cycle rather than as a back-office detail.

A broader set of payment options can help organizations:

• Match payment methods to customer preferences.

• Reduce friction for suppliers and other counterparties.

• Improve the speed of settlement where real-time payments are appropriate.

• Automate payment execution through embedded workflows.

• Reduce the number of disconnected portals and manual handoffs.

• Improve visibility into payment status and exceptions.

The ability to use an API is particularly significant. It allows payment initiation to become part of an upstream workflow rather than a separate activity performed by treasury or accounts payable after the fact. For O2C, the corresponding lesson is that invoicing, payment acceptance, cash application, credit decisions, and reconciliation should be designed as connected processes with shared data and status information.

The press release also says Melio is expanding instant payments so small businesses can make payments at any time, including weekends and holidays. For finance leaders, the broader implication is that payment timing is becoming less constrained by traditional banking windows. That can improve liquidity management, but it also raises the importance of real-time controls, fraud monitoring, approval policies, and accurate cash forecasting.

The Ledger Becomes a Control Point

Xero’s announcements position the ledger as more than a historical record. It is increasingly being presented as the operating layer through which financial workflows are coordinated. JAX’s document capture, reconciliation, payment follow-up, and cash-flow actions are designed to work within or directly against Xero’s financial data.

That architecture has clear O2C advantages. When source documents, bank transactions, invoices, payment status, and customer communications are connected, teams can reduce the data latency that undermines receivables management. Leaders can also establish more consistent definitions for terms such as:

• Open receivable.

• Unapplied cash.

• Promise to pay.

• Payment in process.

• Disputed balance.

• Available cash.

• Expected collection date.

But centralization also concentrates risk. If an AI system or integration writes incorrect information into the ledger, the error can spread across reporting, collections, credit management, and cash forecasting. O2C leaders should therefore evaluate controls as carefully as automation rates.

Important questions include:

• Can the system distinguish a high-confidence match from an uncertain recommendation?

• Is every automated action logged and reviewable?

• Can users approve, reject, or reverse actions easily?

• Are customer communications retained with the relevant transaction?

• Does the system preserve an audit trail when payments are split across sales and fees?

• Can finance teams define approval thresholds by amount, customer, payment type, or risk level?

• How are changes to AI rules, prompts, and integrations governed?

Xero’s language around customer approval and verifiable automation is a useful principle: the system should make routine work easier without making financial decisions opaque.

Preparing for a New Operating Model

Xero’s releases do not mean that every O2C organization should immediately replace its receivables or payments technology. They do suggest several practical priorities.

Map the exception economy

Measure how much staff time is spent on unapplied cash, missing remittance details, duplicate transactions, incomplete documentation, payment discrepancies, and disputed invoices. These are the areas where intelligent automation is most likely to create value.

Connect collections and cash forecasting

A collection promise, payment follow-up, or unresolved exception should influence the cash forecast. If those activities remain in separate systems, finance leaders will continue to manage liquidity with incomplete information.

Treat payment choice as a working-capital lever

Evaluate payment methods based on settlement speed, cost, customer adoption, fraud risk, and reconciliation effort, not just convenience. Faster payment rails are valuable only when the organization can control and accurately account for them.

Set AI governance requirements early

Require explainability, human approval for material actions, auditability, and clear exception queues. Automation without control can create faster errors rather than better cash performance.

Design for open integration

The Melio API announcement reinforces the importance of payment infrastructure that can connect to broader finance and enterprise systems. O2C teams should favor architectures that allow customer, invoice, payment, bank, and credit data to move securely across workflows without creating another isolated application.

The Larger O2C Lesson

Xero’s announcements reflect a broader change in finance technology: the accounting platform is becoming an active participant in financial operations. For O2C leaders, that means the competitive advantage will come less from automating isolated tasks and more from coordinating the complete cash journey, from source documentation and invoicing through payment, reconciliation, collection, and forecasting.

The opportunity is substantial: fewer manual handoffs, faster exception resolution, better cash visibility, and more targeted customer engagement. The challenge is equally clear: finance teams must ensure that AI-driven actions remain explainable, governed, and aligned with credit and collections policy.

Xero’s strategy points toward an O2C model in which the system handles routine work continuously, identifies the transactions and customers that need attention, and gives finance professionals the context to act before a receivable becomes a cash-flow problem.

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Recognition and Recovery

Christopher and Bob explore the early warning signs that can precede a commercial bankruptcy, from stretched payment terms, broken promises, reduced transparency, and unusual third-party payments to a sudden surge in order volume that may signal an inventory “load-up” rather than healthy growth. They also discuss why proactive communication between credit, collections, sales, and field teams is one of the most valuable sources of real-time intelligence.

The conversation then moves from prevention to response: what secured status really means, the limitations of personal guarantees and UCC filings, when involuntary bankruptcy may be an appropriate strategic tool, and how assignments for the benefit of creditors differ from formal bankruptcy proceedings.

The Key Takeaway

Most importantly, listeners will come away with a practical first-response mindset for the moment a bankruptcy notice arrives: halt collection activity that could violate the automatic stay, assess open orders and goods in transit, gather the governing contracts and account history, calendar court deadlines, and quickly evaluate alternative recovery paths such as reclamation, lien, bond, or guarantor rights—with qualified bankruptcy counsel involved early.

For AR leaders, this is a timely, highly practical discussion about turning “we didn’t see it coming” into a more disciplined, informed credit-risk response.

About Our Guest:

Christopher E. Ng, Esq. is the Managing Partner of Gibbs Giden. This law firm provides trusted legal counsel across California, Nevada, and Arizona, with an emphasis in Business, Commercial, Real Estate, and Construction Law. Gibbs Giden is nationally ranked by U.S. News & World Report for excellence in Construction and Real Estate Law, and The Los Angeles Business Journal also recently recognized them as one of LA’s Top 25 Law Firms to Work For and Most Admired Law Firms. he can be reached at cng@gibbsgiden.com.

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One of the toughest decisions in accounts receivable isn’t collecting the money from a customer in distress; it’s deciding how you’re going to collect it.

• Do you escalate the account?

• Do you put them on credit hold?

• Or do you offer a payment plan?

Over the years, I’ve learned there isn’t a perfect answer because every customer is different. What works for one account may be the wrong decision for another. That’s why I don’t believe collections should ever be treated as a one-size-fits-all process.

Our job is obviously to get invoices paid, but I think sometimes we become so focused on reducing the aging that we forget there’s a customer behind every invoice. If that customer has been loyal for years and is going through a temporary cash flow issue, immediately escalating the account and possibly placing it with a collection agency may not be the best business decision.

Don’t Assume You Know Why They Haven’t Paid

One thing I’ve learned is to stop assuming customers aren’t paying because they don’t want to. Sometimes that’s true…but sometimes it isn’t.

I’ve talked with customers who lost a major contract, had unexpected expenses, were waiting on insurance payments, or simply had one bad quarter. They weren’t refusing to pay; they just couldn’t pay everything at once.

Then there is the customer who promises a payment every Friday for six weeks, and somehow every Friday comes and goes without a payment. A completely different situation.

These two customers shouldn’t be handled the same way. Before I make any decisions, I want to understand what’s causing the delinquency. A five-minute conversation can tell you a lot about whether someone is looking for a solution or simply buying more time.

When I Offer a Payment Plan

I don’t offer payment plans just because someone asks for one. I offer them when I believe there’s a realistic chance the customer will honor the agreement. If they’ve communicated with me, acknowledged the balance, and have a history of paying their invoices, I’m much more willing to work with them.

One mistake I see is companies creating payment plans based on what they want instead of what the customer can actually afford. Of course we’d all like the balance paid in two weeks. But if the customer can’t realistically make those payments, the agreement is going to fail. I’d rather collect the balance over several months through a payment plan than spend those same months chasing broken promises.

The Relationship Still Matters

One thing I’ve always appreciated about working in credit is that we get to see a side of customers most people don’t. We talk to them when business is good. We also talk to them when business isn’t so good. How we handle those conversations matters.

I’ve seen customers remember the companies that were willing to work with them during difficult times, and I’ve seen those same customers become some of the most reliable accounts once they recovered. That doesn’t mean we ignore past-due invoices or accept excuses forever. It means we recognize the difference between a customer who needs help and one who’s taking advantage of our patience. There’s a big difference.

Every Payment Plan Needs Accountability

This is where I think many companies miss the mark. The collector spends time putting together a payment plan, sends the agreement, and then doesn’t look at the account again until several payments have been missed. A payment plan isn’t something you set up and forget. It needs to be monitored.

I keep track of every installment.

• Did the payment arrive on time?

• Was it late?

• Did the customer call before they missed it?

• Have they stayed consistent?

Those answers tell me whether the agreement is working or whether I need to start thinking about another approach.

Good communication also makes a difference. A reminder before the payment is due. A quick thank-you after it’s received. A phone call if something changes. Those small conversations go a long way toward keeping everyone accountable.

Knowing When It’s Time to Escalate

Not every account deserves another payment plan. There comes a point where you’re no longer helping the customer; you’re simply delaying the inevitable. If someone continually ignores your calls, misses every commitment they make, or asks for another extension every month, it’s probably time to change your strategy.

For me, broken promises are usually the biggest warning sign. I can work with someone who is honest about their situation. It’s much harder to work with someone who keeps making commitments they have no intention of keeping.

When that happens, escalation becomes the right business decision. Whether that’s placing the account on credit hold, involving management, changing payment terms, or sending the account to the next stage of collections depends on your company’s process. The important thing is recognizing when flexibility is no longer producing results.

Payment Plans Are About More Than Collections

I think payment plans are often viewed as a collections tool, but they’re really a credit management tool:

• A successful payment plan improves cash flow.

• It reduces the risk of bad debt.

• It helps maintain a customer relationship that’s taken years to build.

Most importantly, it creates a path for the customer to resolve their balance while allowing your company to continue bringing cash through the door. That’s a better outcome than letting an account continue to age while waiting for a payment that may never come.

Final Thoughts

If there’s one thing I’ve learned over the years, it’s that there isn’t a script for every collection call. Every account tells a different story. Some customers need a little flexibility. Others need firm boundaries. The key is knowing the difference.

A payment plan shouldn’t be your first response to every overdue invoice, and it shouldn’t be your last option either. It’s simply another tool we have as credit professionals.

When it’s used with good judgment, clear communication, and consistent follow-up, it can strengthen customer relationships while improving cash flow. And at the end of the day, that’s what good accounts receivable is really about: getting paid without losing a good customer in the process.

About the Author

Waleska Gold, MAcc, is a senior accounts receivable and credit management professional with over 20 years of experience helping organizations improve collections performance, reduce credit risk, and strengthen cash flow. She can be reached at gold_wal@yahoo.com.

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Collection negotiation is about much more than discussing payment terms. Every conversation is an exercise in communication, psychology, and relationship management. While most customers negotiate in good faith, collectors may encounter individuals who intentionally or unintentionally use aggressive tactics, or even mistruths designed to manipulate the discussion, delay payment, or pressure the collector into making unnecessary concessions.

In these situations, there are ways that you can improve your chances of reaching an acceptable agreement that protects both the customer relationship and your company’s financial interests. It starts by early recognition of this type of behavior. Then, remain calm, maintain a laser focus on objective facts, and avoid emotional reactions.

1. Don’t Allow the Environment to Control the Negotiation

Negotiation pressure isn’t always created through words. Productive negotiations require an environment where both parties can communicate clearly and thoughtfully. Sometimes the environment itself becomes part of the strategy. Don’t let a poor meeting location compromise the discussion. Avoid such tactics as unrealistic meeting schedules, loud surroundings, excessive interruptions, or intimidating seating arrangements, such as your counterpart sitting back lit by the glare of a window, making it difficult to see facial expressions. These can all increase your stress level and reduce thoughtful decision-making. If you find yourself in a compromising situation, request a more appropriate meeting time or setting.

2. Learn to Recognize Insincere Claims and Deceptive Tactics

Excessive flattery or unrealistic promises. A customer may suddenly describe your company as their highest priority, make bold commitments about future business, or compliment your organization in ways that seem inconsistent with past behavior. This may sound encouraging, but comments like these should never replace your objective analysis. Words alone do not change credit risk or payment history.

Quickly identify delaying and evasive tactics. Delays can be a strategy to get you to agree to concessions. You may hear that additional approvals are required. When you are seemingly close to an agreement, your counterpart may set new conditions or terms required for an agreement. They may say that you will have to take it or leave it.

That is when you should ask probing questions to uncover the customer’s underlying motives and interests. If the claim is that someone else must approve, then insist that you go to that person directly. Explain to your counterpart that there are consequences of failing to reach an agreement. How it will affect their company, or even the prospects of the person you are negotiating with. As a last resort, establish interim agreements with firm deadlines.

Claims by your counterpart that they have full authority to finalize an agreement. As a rule of thumb, always engage in serious negotiations with a known decision maker who has the authority to honor an agreement, not someone who in reality will actually require additional approvals.

Professional skepticism is not distrust; it is simply good business practice. When you have doubts, take the following steps:

• Verify who has decision-making authority.

• Treat tentative agreements as drafts until formally approved.

• Establish clear deadlines for additional review or approval.

• Always confirm important commitments in writing.

Be prepared to react to post-agreement surprises. You may find that critical information or issues suddenly emerge after both parties believe they have reached an agreement based on what was purported to be factual. It could be previously undisclosed financial problems, additional internal approval requirements, or just plain deception to get the deal done.

As hard as it may be, avoid reacting emotionally. Acknowledge the new information and explain that honesty and transparency are necessary to conclude a successful negotiation. Verify the facts to determine how the new information changes the proposed agreement. If changes to the agreement are needed to address these new insights, reopen the discussion, and explore alternative trade-offs to avoid an unnecessary impasse.

3. Don’t Be Intimidated by Aggressive Negotiation Tactics

See unreasonable pressure for what it is: a tactic. You may encounter someone who attempts to gain leverage through pressure rather than logic or by presenting reasonable alternatives. Look out for tactics such as:

• A series of unreasonable demands.

• Good cop/bad cop approaches.

• Bringing additional participants into the meeting in an attempt to overpower or intimidate you.

• Applying pressure for an immediate decision.

• Intimidating body language or verbal aggression.

There are effective ways you can deal with these tactics. Be consistent in your approach. Avoid becoming defensive or argumentative. Instead, calmly bring the tactic into the open, redirect the discussion to objective facts, and remind everyone of the original purpose of the negotiation. If emotions begin to escalate, suggest a brief break. Returning with a clear focus on facts and mutually beneficial solutions often restores a productive discussion.

4. Evaluate Threats Objectively

Threats are another common pressure tactic. A customer may threaten litigation, say they will take their business elsewhere, or suggest they will go over your head and contact one of your senior executives. You will need to parry the threat and redirect the discussion back to the facts at hand.

Preparation is your best defense. Have documented facts, and understand your company’s policies. Anticipate possible threats and be prepared with alternative responses. Being prepared will help you to neutralize threats before they gain momentum.

Before reacting, evaluate the credibility of the threat by asking yourself:

• Is the threat realistic?

• Does the customer have a history of following through?

• What are the actual business implications?

The Bottom Line

You are far from helpless when confronted with deceptive, aggressive, and evasive negotiation tactics that are intended to shift attention away from the real issues. Recognize these behaviors and tactics early. Remain calm under pressure, verify critical information, and consistently redirect discussions toward objective facts and practical business solutions.

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On Our Radar

Bonds Are Getting Hammered, and Wall Street Says the Rout Won’t End Anytime Soon, by Sam Goldfarb and Richard Rubin in The Wall Street Journal, August 6, 2026

Real-Time Payments Reframed, by J.P.Morgan, August 17, 2026

Liquidity Management is the Lifeblood of Your Business, on the Kyriba Blog

JPMorgan strategist warns US corporate equity exceeds 400% of GDP, dwarfing dot-com bubble peak, by the Editorial Team at Crypto Briefing, August 14, 2026

Average cost of data breaches is up 12% this year, by David McCann in CFO Dive, August 13, 2026

FinTechs Muscle Into Banks’ Trade Finance Turf, by PYMNTS, August 13, 2026

Shifting Gears: Priorities of Fintech CFOs in 2026, produced by Raconteur and published on Tech Republic, August 11, 2026

Credit card debt hits $1.26 trillion as delinquencies surge, Fed reports, by Chris Marten on ECIKS.org, August 11, 2026

FinCEN Permanently Excludes U.S.-Owned Companies From Ownership Registry: Treasury’s financial intelligence unit will delete from the beneficial ownership database information already filed by U.S. people, by David Smagalla in the Dow Jones Risk Journal, August 11, 2026

AI investments trigger decreased training budgets, by David McCann in CFO Dive, August 10, 2026

Risk of Global Recession in 2026: How Businesses Can Prepare, by Sabih Siddiqui, published by TechBlocks

Facing AI ‘Apocalypse,’ Once-Hot Software Companies Race to Reinvent Themselves: Generative AI is steamrolling the once booming industry known as software-as-a-service, by Kate Clark in The Wall Street Journal, August 6, 2026

Payment Friction Costs Middle Market Firms Nearly 2% of Annual Revenue, by PYMNTS, August 5, 2026

OpenAI’s finance AI demo leaves governance questions unanswered: Questions about controls, auditability, security and data integrity dominated the webinar’s Q&A chat, while presenters focused on automation and productivity, by Adam Zaki in CFO Dive, August 4, 2026

Why Crypto Will Be the New Standard for Global Payouts, by PaymentsJournal, July 29, 2026

Working Capital Reimagined: How CFOs Unlock Value Beyond Core Finance Levers, by Simon Horan, et. al, L.E.K. Consulting whitepaper, July 24, 2026

From a Press Release dated August 14, 2026, Phoenix, Arizona

U.S. credit-card stress remains persistently elevated, not merely episodically higher. In Q2 2026, 6.97% of credit-card balances flowed into the 90-plus-day delinquency, which is above the roughly 6.75% level at the start of the Great Recession. At the same time, annual bankruptcy filings rose 12.2% to 608,511, while total credit-card balances reached $1.263 trillion

For small businesses, the significance is straightforward: a financially stretched customer has less discretionary capacity, greater price sensitivity, and a higher likelihood of delaying payment, even for essential purchases. For vendors selling to small businesses, household credit conditions can also matter indirectly: many owner-operators rely on personal credit cards, personal guarantees, or intertwined household and business cash flow to bridge working-capital gaps.

SMB Implications

The data does not establish that the economy is entering a repeat of the Great Recession. The current serious-delinquency flow remains materially below its Q4 2009 peak of approximately 10.96%, and it has been broadly stable rather than accelerating over the past year. But persistence is the concern: elevated delinquency has now lasted roughly two and a half years, while bankruptcy filings have climbed in every quarterly reporting period since 2022.

For a small business, that environment can translate into:

• Tighter personal and business borrowing capacity, even as aggregate card limits continue to rise.

• More volatile cash flow as owners use revolving credit to cover operating expenses.

• Reduced ability to absorb unexpected costs, late-paying customers, seasonal slowdowns, or inventory shocks.

• A greater tendency to defer software renewals, equipment upgrades, professional services, and nonessential purchases.

• Higher vulnerability where the owner’s personal finances serve as the business’s informal liquidity backstop.

Implications for Vendors

Vendors should view this less as a blanket warning to restrict credit and more as a reason to improve segmentation, monitoring, and early intervention. The relevant operational risk is not simply a customer’s current payment status; it is the speed with which a previously reliable buyer can move from short-term strain to persistent delinquency.

The important distinction in the release is between a stock measure—12.92% of outstanding card balances classified as 90+ days delinquent—and the 6.97% flow measure of balances newly entering serious delinquency. These are different indicators; neither should be read as an immediate measure of business default risk. Still, together with the rise in bankruptcies, they point to sustained pressure on a meaningful share of households and owner-managed businesses.

For finance leaders, the response should be disciplined rather than reactive: tighten exception governance, monitor payment-pattern changes earlier, protect high-risk receivables, and give viable small-business customers clear ways to remain current. In a prolonged consumer-credit stress cycle, strong order-to-cash practices become both a loss-prevention tool and a customer-retention capability.

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For order-to-cash (O2C) and finance leaders, that gap is more than a transportation-market datapoint. It can compress gross margins, distort customer profitability, raise working-capital needs, and expose credit terms that were priced for a very different cost environment.

The Signal Behind the Index

The Index points to a market where capacity, not demand, is setting the price. After several years of excess trucking capacity, available trucks have become scarcer. Fuel prices added to shipping costs, but U.S. Bank and the American Trucking Associations identify capacity tightening as the larger driver of the spending increase. Part of that equation is connected to the revocation of CDL licenses held by illegal immigrants.

Tightening capacity matters — a lot. A conventional demand-led freight increase can suggest that customers are ordering more, creating opportunities for revenue growth. This is different: shipments are broadly flat to down while the cost of serving those shipments rises.

For a manufacturer, distributor, or wholesaler extending Net terms, the financial sequence becomes more challenging:

• The company incurs elevated freight expense at shipment.

• It may invoice the customer only after shipment or delivery.

• Cash arrives weeks later, assuming the invoice is accurate, undisputed, and collected on time.

• Margin pressure appears immediately, while the cash impact persists through the collection cycle.

In short, transportation inflation can become a working-capital issue before it becomes visible as a customer-payment problem.

The Regional Picture Matters

The national number should not be used as a universal surcharge or budgeting assumption. The Index shows striking regional variation, particularly between shipment activity and spending.

The Southwest deserves particular attention: shipment activity declined 0.6% sequentially and 20.2% year over year, while spending rose 11.2% from the prior quarter and 39.9% year over year. The West and Southeast also experienced double-digit sequential increases in freight spending.

For finance teams, that argues for profitability and credit analysis at the customer-lane level: not only by customer, product category, or region. A customer with modest order growth may still be materially less profitable if its shipments originate from or deliver into capacity-constrained lanes.

Margin Is Now an O2C Issue

Freight is often treated as a logistics expense or a commercial-policy question. But when cost changes this sharply, it becomes a cross-functional O2C control point.

Consider a supplier that sells an order on Net 60 terms with a thin gross margin and an agreed freight allowance. If freight costs rise, or a fuel surcharge is added to the bill after the commercial terms were negotiated, the supplier effectively finances both the customer’s inventory and a larger share of the delivery expense for two months. If the customer later disputes a freight charge, short-pays, or requests documentation, the exposure extends even longer.

That makes four Order-to-Cash disciplines especially important:

1. Invoice clarity. Freight, fuel surcharges, accessorial charges, and delivery terms should be explicit and consistently reflected on the order, shipment documentation, invoice, and customer portal.

2. Dispute prevention. A missing proof of delivery or an unexpected freight line item can convert an otherwise collectible invoice into a deduction case.

3. Customer profitability analysis. Measure contribution margin after freight by account, lane, shipment type, and payment behavior, not simply revenue or nominal gross margin.

4. Credit-review cadence. Customers experiencing their own cost and demand pressure may lengthen payment behavior even if their formal credit limit remains appropriate.

The central question for credit and collections leaders is not simply, “Will this customer pay?” It is also, “What does it cost us to carry and serve this receivable until payment arrives?”

Rethink Your Freight Terms

The most effective response is usually upstream. Once an order has shipped, customer-service, billing, and collections teams are left to manage the consequences of commercial terms that may no longer match the cost-to-serve reality.

Finance and commercial leaders should revisit whether current policies adequately address:

• Freight-prepaid versus freight-collect arrangements.

• Minimum order values needed to qualify for free freight.

• Lane-specific or product-specific freight recovery.

• Fuel-surcharge mechanisms and the cadence for updating them.

• Customer-specific exceptions that have accumulated over time.

• The approval workflow for orders with negative or deteriorating net contribution after freight.

This is not necessarily an argument for imposing blanket surcharges. Broad price actions can create unnecessary customer friction, especially when regional conditions vary so widely. A better approach is disciplined segmentation: identify the accounts and lanes where the gap between shipment volume and freight spend is creating the greatest margin and cash-conversion risk.

Watch for Second-Order Effects

Higher freight expense can affect both sides of a B2B transaction. Suppliers face a larger cash outlay before collection; buyers may face rising landed costs, inventory pressure, and their own tighter liquidity.

Collections teams should monitor whether late payments, partial payments, deductions, and freight-related disputes cluster in specific customer segments or geographies. They should also establish a rapid feedback loop with sales, customer service, transportation, and credit teams when patterns emerge.

Useful operating indicators include:

• Freight-related deductions as a share of billed freight.

• Dispute cycle time for proof-of-delivery and accessorial-charge claims.

• DSO and past-due aging for customers receiving freight allowances.

• Net contribution after freight and bad-debt reserve by customer segment.

• Payment behavior before and after freight-policy changes.

A rise in deductions may look like a collections problem, but it can signal an order-management, pricing, shipment-documentation, or contract-governance failure.

A Warning, But Not a Recession Verdict

The Freight Index should not be read as a simple declaration of broad economic strength or weakness. The data instead show a more nuanced environment: demand remains soft by volume, while transportation pricing is rising because capacity is tighter. The Index is based on actual domestic truckload and less-than-truckload freight-payment transactions and is seasonally and calendar adjusted, making it a useful operating signal for shippers rather than merely a sentiment survey.

For finance leaders, the practical takeaway is clear: do not wait for sales volumes to rebound before acting on freight economics. The cost-to-serve can worsen even in a low-volume environment, and credit terms can magnify the cash impact.

Companies that connect transportation data with pricing, invoicing, credit exposure, collections performance, and customer profitability will be better positioned to protect margin. They will also be able to avoid discovering too late that a growing receivables balance is carrying far more cost than it appears.

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Christensen distinguished between sustaining innovations and disruptive innovations.

• Sustaining innovation improves an established product or process for established customers: better cash-application accuracy, more sophisticated credit scoring, more configurable collections workflows, or richer ERP reporting. These improvements matter, and incumbent organizations are typically well positioned to deliver them because they have the data, customer knowledge, capital, and operating discipline.

• Disruptive innovation begins elsewhere. It often starts as a simpler, lower-cost, more accessible solution for customers who are overserved by existing offerings—or for organizations that previously could not use the category at all. At first, it may appear inferior on the performance measures valued by the mainstream market. Over time, it improves and moves into more demanding use cases.

That is the dilemma: leaders rationally allocate resources toward the customers and capabilities that produce revenue today. Yet that same discipline can cause them to dismiss a new model before it becomes strategically important.

Implications for O2C

Order-to-Cash (O2C) functions are especially vulnerable to this pattern because they are built around legitimate priorities: control, accuracy, compliance, customer service, and cash predictability. These priorities can unintentionally turn into filters that reject useful experimentation.

Consider the recurring questions O2C teams ask of a new technology:

• Can it handle our largest customers’ requirements?

• Does it integrate perfectly with our ERP and bank environment?

• Does it meet every exception-management need?

• Can it prove a near-term reduction in DSO?

• Does it preserve the existing control framework without redesign?

These are sensible questions for a mature, enterprise-wide deployment. But they can be poor screening questions for an early-stage capability.

A self-service payment portal for smaller customers, for example, may initially lack the depth required for complex national accounts. An AI-assisted collections tool may need tight human oversight before it can handle sensitive strategic relationships. A streamlined embedded-credit experience may not match the granularity of a long-established enterprise credit process.

The mistake is not recognizing these limitations. The mistake is assuming that early limitations mean the model has no future.

Sustaining Versus Disruptive O2C Innovation

The key distinction is strategic, not technical. A new platform is not disruptive merely because it uses AI, automation, APIs, or machine learning. Christensen’s framework defines disruption as a process: an offering begins by serving small businesses or overserved customers with a simpler, more affordable, or more convenient alternative, then improves enough to move upmarket.

The O2C Blind Spot

For O2C leaders, the most dangerous assumption may be that innovation must first win in the company’s most complex environment. That assumption favors tools designed for high-volume, high-complexity, highly customized enterprise operations.

Too often, organizations fail to realize the bifurcation inherent to their receivables portfolio. While 20% of customers provide 80% of revenue, the remaining customers demand a disproportionate amount of handling. Going one step further, the bottom 40-50% of customers may only contribute 5% of revenue, but are typically handled similarly (run through the same processes) as the top 20%.

This assumption that innovation must first win in the company’s most complex environment can leave a blind spot around:

• Small and mid-market customers who need a faster, simpler credit or payment experience.

• Business units, geographies, or channels operating outside the core ERP model.

• Manual processes that remain too costly to automate using traditional enterprise approaches.

• New commercial models that integrate payment terms, financing, and fulfillment.

• Early solutions that reduce friction for customers even before they optimize every back-office metric.

In Christensen’s view, strong companies often fail not because management is careless, but because it listens carefully to its best customers and directs investment toward attractive, established opportunities. In O2C, that may translate into a well-run finance organization continuously improving its core process while missing a lower-cost or more accessible model that changes customer expectations.

A Practical Response

The answer is not to abandon controls or chase every fintech trend. It is to manage two innovation portfolios at once.

First, continue funding sustaining innovation. Core O2C modernization remains essential. Improve invoice delivery, payment adoption, credit intelligence, dispute resolution, collections effectiveness, cash application, and data quality. These are meaningful sources of working-capital performance and customer experience.

Second, create protected space for emerging models. Early-stage opportunities should not be forced to compete immediately against the ROI profile of mature transformation programs. Give a small team a narrow mandate, a specific underserved use case, and permission to learn.

That group is often a better starting point than the company’s largest and most demanding accounts.

Next Steps

O2C leaders can apply Christensen’s thinking through a disciplined set of actions:

1. Separate operational optimization from discovery. Do not use the same governance, success criteria, and timelines for both.

2. Map overserved and unserved segments. Identify where customers tolerate a simpler experience in exchange for speed, access, transparency, or convenience.

3. Fund small, contained experiments. Pilot in one channel, region, customer tier, or business unit, not across the entire enterprise.

4. Measure learning alongside ROI. Track adoption, friction removed, customer behavior, exception rates, and scalability, not just immediate DSO impact.

5. Protect the new model from legacy constraints. A pilot designed to replicate every existing workflow is unlikely to test whether a different workflow is better.

6. Define the escalation trigger. Establish in advance what evidence would justify greater investment: adoption thresholds, payment conversion, loss performance, customer retention, or cost-to-serve improvement.

Purchase the Book

The Leadership Takeaway

For O2C executives, The Innovator’s Dilemma is not an argument against process rigor. It is an argument against letting today’s definition of rigor prevent tomorrow’s business model from being tested.

The best finance leaders will keep improving the established O2C engine while deliberately exploring the simpler, smaller, and initially imperfect models that incumbents are naturally inclined to ignore. That balance, operational excellence paired with protected experimentation, is how O2C organizations can defend cash flow today without becoming captive to yesterday’s assumptions.

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1. The Leap to Agentic AI and Autonomous Workflows

The most significant shift in 2026 is the transition from algorithmic workflows and Robotic Process Automation (RPA) to Agentic AI. While traditional automated workflows followed rigid “if-then” scripts and halted when encountering errors or anomalies, agentic systems use contextual reasoning to resolve exceptions independently within defined guardrails.

In O2C operations, these AI agents act as “digital co-workers”. For customer-centric collections, they prioritize outreach based on real-time risk signals rather than static aging reports, drafting personalized dunning emails that understand customer intent. In remittance processing, AI now achieves 90–95% straight-through processing rates by autonomously matching bank feeds to open invoices, even when data is unstructured or messy. Furthermore, for dispute and deduction handling, agentic AI can independently aggregate backup documentation, such as bills of lading and proof of delivery, to verify claims and automatically generate denial packages for invalid deductions.

2. The Death of the Paper Check and the Rise of Real-Time Payment Rails

The “demise of the paper check” has accelerated, with check usage falling to just 26% of B2B payments in 2026, down from 33% only four years ago. In their place, real-time payments (RTP) and FedNow have moved from consumer-focused novelties to essential B2B tools. With transaction limits for these rails now reaching $10 million, they are increasingly used for high-value, time-sensitive settlements and liquidity moves. This shift to instant settlement makes pre-payment validation critical, as the window for recovering fraudulent or erroneous payments has virtually disappeared.

3. Eliminating Friction: Embedded Finance and Open Banking

Expectations for B2B transactions have been “consumerized,” leading to a surge in embedded finance, which is projected to reach $7 trillion in U.S. transaction value by the end of 2026. By embedding payment portals directly into the systems users already inhabit, companies eliminate the need for awkward manual re-keying and siloed portals. Open banking further supports this by enabling account-to-account (A2A) transfers and PayPal-style wallets, providing buyers with the same ease and convenience they experience in their personal lives.

4. ISO 20022: A Common Language for Global Remittance

The adoption of ISO 20022 data standards has quietly revolutionized business cash flows. By providing a common financial language for electronic transactions, this standard allows richer remittance data, including invoices and purchase orders, to travel seamlessly with the payment. For finance teams, this means fewer disputes, higher straight-through processing rates, and significantly faster cash application.

5. Predictive Forecasting and 360-Degree O2C Visibility

In 2026, cash flow forecasting has moved from looking at historical averages to AI-driven predictive modeling. These models analyze real-time customer behavior, seasonal shifts, and macroeconomic signals to provide a dynamic view of expected inflows. Some enterprises have reported reaching 99.3% accuracy in their receivable forecasting, allowing CFOs to make liquidity decisions with unprecedented confidence. This level of visibility transforms accounts receivable (AR) from a back-office administrative task into a strategic lever for capital planning.

6. Driving Performance through In-Depth AR Portfolio Analysis

AI’s true power culminates in its ability to perform deep AR portfolio analysis to mitigate risk. By assessing past payment behaviors, flagging accounts and portfolio segments at the highest risk of default, and identifying low-risk, higher-profit customers and portfolio segments, AI allows finance leaders to proactively adjust credit policies, focus collection efforts where they are most needed, and reveal revenue and profit growth opportunities. This strategic shift from reactive to predictive management can reduce bad debt exposure by up to 20% and improve overall recovery rates, ensuring that the AR department consistently drives better financial performance for the enterprise.

Key Action Steps for 2027 Readiness

To prepare for 2027, Order-to-Cash (O2C) leaders must transition from manual oversight to autonomous operations, shifting their focus from task execution to strategic risk management and ecosystem orchestration.

• Deploy Agentic AI “Digital Co-workers”: Move beyond rigid RPA to goal-oriented AI agents, allowing human teams to focus on high-level negotiations and strategic relationships.

• Modernize Payment Rails and Controls: O2C leaders should adopt real-time payments (RTP) and FedNow for time-sensitive settlements.

• Embrace Embedded Finance and Open Banking: Meet “consumerized” B2B expectations by integrating payment portals and links directly into existing workflows. This eliminates friction and provides buyers with a wider range of payment choices, such as A2A transfers and digital wallets.

• Mandate ISO 20022 Data Standards: Prepare for 2027 by ensuring your systems can ingest ISO 20022 structured data.

• Achieve “Zero-Latency” Predictive Forecasting: Implement real-time AI models that analyze macro-trends and individual buyer behavior to turn the AR sub-ledger into a reliable tool for enterprise liquidity planning.

• Upskill the Workforce as “Strategic Exception Managers and Data Analysts”: With AI capable of handling up to 80% of repetitive tasks, redefine team roles to focus on AI oversight and portfolio analysis.

The ultimate objective for 2027 is “Lights Out Finance.” Touchless, end-to-end O2C operations, where AI autonomously manages the bulk of transactions, facilitate an environment that frees up human professionals to concentrate on higher-level activities that support the strategic growth of the business.

Sources:

1. 2026 B2B Payment Trends: Faster Rails, Smarter Controls (onPhase)

2. Accounts receivable trends shaping cash collections in 2026 (Corcentric)

3. Autonomous Finance: The 2026 Guide to AI-Driven Operations (Automation Anywhere)

4. Four trends that will transform B2B payments in 2026 (Payments Industry Intelligence)

5. Global Accounts Receivable Automation Market Size 2026 – 2035 (Custom Market Insights)

6. Key B2B Trends in 2026: 12 Moves to Win Enterprise Demand (StartUs Insights)

7. Lights Out Finance™: Autonomous Finance Operations (Deloitte US)

8. Order-to-Cash Automation: Processes, Benefits, and Industry Insights (HighRadius)

9. What Is AI in Order-to-Cash? (The 2026 Guide to Autonomous O2C) (Emagia Corporation)

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Ask someone outside of Accounts Receivable (AR) what a collections team does, and you’ll probably hear the same answer: “They call people to collect past-due invoices.” Well... yes. That is the ultimate goal. But if you’ve spent any time in Accounts Receivable, you know that’s only a small part of the story.

Great collectors are relationship builders, investigators, problem solvers, negotiators, project managers, teachers, and occasionally miracle workers. They protect cash flow while preserving customer relationships. They work with Sales, Customer Success, Billing, Finance, and Legal to remove the obstacles preventing invoices from being paid.

Customer Focus and Other Attractions

In many ways, the collections team becomes the customer-facing side of the entire Order-to- Cash (O2C) process. Sometimes a payment is delayed because a purchase order is incorrect. Other times an invoice never made it through a customer portal. Maybe banking information needs to be validated, a dispute has surfaced, or the customer simply doesn’t know who to contact inside your organization.

A great collector doesn’t just ask, “When will this be paid?” They ask, “What’s preventing this from being paid?” Collections isn’t just about collecting cash. It’s about removing the barriers that prevent customers from paying. And that’s what makes the profession so interesting.

No two days are ever the same. One moment you’re sending reminder emails. The next, a multimillion-dollar, deadline-driven order suddenly requires dozens of invoices to be uploaded before processing can continue, only to discover every invoice is missing the required purchase order number. Suddenly, your day isn’t about collections at all. It’s about solving a problem that keeps your customer moving and your company getting paid.

Other days begin with a phone call from a frustrated customer. Maybe they’re upset over a billing issue. Maybe they can’t locate invoices. Maybe they feel like no one is listening. Great collectors understand that sometimes the most productive thing they can do isn’t talk; it’s listen. By understanding the customer’s challenge, they can connect the right people, resolve the issue, strengthen the relationship, and ultimately move the account toward payment. After all, customers are the reason we’re all here.

Why I Created the Collection Archetypes

After years of leading collections teams, I started noticing something interesting. My highest-performing teams weren’t made up of multiple people who approached collections exactly the same way. Quite the opposite.

Each collector had a unique set of strengths. Some thrived under pressure. Others could build relationships with anyone. Some loved digging through data to solve mysteries. Others naturally coached teammates and improved everyone around them.

That’s when the Collection Archetypes were born. Originally, they were simply a fun way to recognize the different personalities that make up every collections department. But something unexpected happened. People immediately recognized themselves and each other, the conversations started with laughter.

• “I’m definitely the Firefighter.”

• “You’re 100% the Detective.”

• “Only you would be the Process Architect.”

Then the conversations became something more meaningful. People began appreciating strengths they hadn’t noticed before.

Wearing More Than One Hat

One important thing to remember is that these archetypes aren’t labels. No collector spends an entire career wearing just one hat. In fact, most of us wear all twelve at different times. Some days you’re the Detective. By lunch you’re the Firefighter. Before the day ends you’ve become the Relationship Builder, the Negotiator, and maybe even the Process Architect.

The longer you work in collections, the more you learn when each approach is needed. That’s exactly why great collection managers don’t try to change who people are. Instead, they help them recognize their natural strengths while developing the ability to adapt when the situation calls for it.

The result isn’t twelve identical collectors. It’s a balanced team capable of handling almost anything.

The 12 Collection Archetypes

1. The Firefighter

Every team has one. The Firefighter can smell a crisis before Outlook has finished loading. A month-end deadline is slipping, a major customer has an urgent issue, and someone in the executive suite wants an answer in five minutes. While everyone else is still figuring out what happened, the Firefighter is already working on the solution.

They don’t create chaos; they simply have a remarkable ability to stay calm in the middle of it. They thrive under pressure and have an incredible ability to prioritize what matters most. If you’ve ever heard someone say, “I’ve got this,” while they’re opening twelve browser tabs, you’ve probably found your Firefighter.

2. The Detective

Every team has one. Give them a missing purchase order, an unexplained deduction, and a payment that somehow landed in the wrong legal entity, and you’ve just given them the best part of their day.

The Detective doesn’t see problems; they see puzzles waiting to be solved. They’re the first to notice when a decimal point looks suspicious, a payment route doesn’t match, or an invoice seems to have vanished into thin air. They won’t stop until every clue has been followed and every mystery has been solved. If you’ve ever watched someone trace a $4.50 discrepancy through three legal entities and a paper trail from 2019...you’ve probably found your Detective.

3. The KPI Wizard

Every team has one. Ask how collections are performing, and before you’ve finished the question they’ve already opened a dashboard, filtered three reports, and started explaining why DSO moved by 0.3 days. The KPI Wizard believes every number tells a story; you simply have to know where to look.

They don’t just report the metrics; they transform data into insights that help the team improve and keep everyone accountable. If you’ve ever heard someone say, “In Excel we trust,” while color-coding a dashboard...you’ve probably found your KPI Wizard.

4. The Relationship Builder

Every team has one. They’re the first to remember a customer’s birthday, ask about a recent vacation, or somehow remember the names of their customer’s children, or even the family dog. The Relationship Builder doesn’t simply collect payments; they build trust. They know that strong relationships often turn difficult conversations into productive partnerships and frustrated customers into loyal ones.

Sometimes Sales even asks them to join customer calls because they know the Relationship Builder can strengthen the conversation. If you’ve ever seen a customer happily pay a late fee because they genuinely enjoyed the phone call...you’ve probably found your Relationship Builder.

5. The Diplomat

Every team has one. Sales blames Billing. Billing blames Finance. Finance blames the customer. The customer blames everyone. Then the Diplomat walks into the conversation. They’re the first to step in when emotions are running high, a contract dispute stalls progress, or communication begins to break down. They don’t simply compromise; they find the exact words that allow everyone to move forward.

Their greatest talent isn’t winning arguments. It’s making everyone feel heard. If you’ve ever watched someone de-escalate what looked like a corporate shouting match and somehow leave both sides smiling...you’ve probably found your Diplomat.

6. The Process Architect

Every team has one. They can spot an unnecessary click from across the room. While everyone else is working around an inefficient process, the Process Architect is already asking, “There has to be a better way.”

They’re the first to identify bottlenecks, redesign workflows, simplify invoice routing, and improve efficiency. They don’t simply accept how things have always been done; they design how they should be done. If you’ve ever watched someone rewrite an entire Standard Operating Procedure just to save the team four seconds a transaction...you’ve probably found your Process Architect.

7. The Hunter

Every team has one. Large balances don’t intimidate them. If anything, they make Monday mornings a little more exciting. The Hunter naturally gravitates toward the largest overdue accounts, the highest-risk customers, and the most challenging conversations. They aren’t motivated by conflict; they’re motivated by results.

Confident, persistent, and fearless, they understand that sometimes difficult conversations are simply part of protecting the business. If you’ve ever watched someone confidently call a company executive regarding a million-dollar invoice before finishing their first cup of coffee...you’ve probably found your Hunter.

8. The Mentor

Every team has one. They’re the first to offer guidance to a new collector, share their screen to explain a complicated process, or celebrate a teammate’s success before mentioning their own. The Mentor understands that knowledge only becomes valuable when it’s shared. They don’t hoard experience; they invest it in others. They know that today’s new hire may become tomorrow’s leader, and they genuinely want to help make that happen.

In many ways, the Mentor becomes the foundation of the team. They are the steady presence others rely on when questions arise, confidence wavers, or a new challenge appears. Their patience creates confidence, and their encouragement creates future leaders. They’ve answered the same question thirty-seven times...and somehow still smile while answering it for the thirty-eighth. Not because they enjoy repeating themselves. Because they remember what it felt like when first starting out.

If you’ve ever had a coworker explain a complex billing process using the simplest analogy you’ve ever heard—and somehow leave you believing you could do it yourself...you’ve probably found your Mentor.

9. The Global Navigator

Every team has one. While the rest of the team is just finishing their morning coffee, the Global Navigator has already spoken with Asia, answered Europe, and is planning their afternoon around North America. They don’t see borders; they see connections. They instinctively know when Golden Week, Diwali, Chinese New Year, Carnival, or a UK Bank Holiday will impact cash flow. They understand that building global relationships means respecting different cultures, business customs, and even the occasional language barrier.

For them, the world isn’t divided into countries; it’s divided into time zones. If you’ve ever watched someone schedule a meeting across Tokyo, London, and New York without opening a time-zone converter...you’ve probably found your Global Navigator.

10. The Innovator

Every team has one. While everyone else is figuring out the workaround, the Innovator is already asking, “Why are we doing it this way?” They’re the first to volunteer for a beta test, suggest an automation solution, or explore how new technology can eliminate repetitive tasks.

They don’t fear change; they’re energized by it. To them, every manual process is simply an opportunity waiting to be improved. If you’ve ever heard someone casually say, “I wrote a quick script so none of us have to do that manually anymore”…you’ve probably found your Innovator.

11. The Root Cause Solver

Every team has one. While others focus on today’s overdue invoice, the Root Cause Solver is already asking the next question: “Why did this happen in the first place?” They know that solving the same problem every month isn’t success; preventing it from happening again is. Whether it’s improving billing accuracy, fixing an onboarding process, or partnering with another department, they look beyond the symptom to eliminate the cause.

They don’t just solve today’s problem; they prevent tomorrow’s. If you’ve ever heard someone say, “Let’s fix the process so we never have to deal with this again,”...you’ve probably found your Root Cause Solver.

12. The Strategic Partner

Every team has one. While others focus on today’s invoices, the Strategic Partner is already thinking about next quarter’s working capital, customer risk, and how Accounts Receivable can support the company’s long-term goals. They don’t just look at invoices. They see the bigger picture.

They understand that collections isn’t simply about bringing in cash; it’s about strengthening the business through better decisions, stronger partnerships, and healthier customer relationships. They’re just as comfortable discussing DSO with a collector as they are discussing working capital with the CFO. If you’ve ever watched someone turn a routine aging review into a conversation about business strategy... you’ve probably found your Strategic Partner.

Every Circus Needs a Ringmaster

By now, you’ve probably recognized members of your own team, and perhaps even yourself. The truth is, no one spends an entire career wearing just one hat. The best collectors learn to adapt, and the best teams are built on the unique strengths each person brings.

But behind every great team is someone who sees those strengths before others do. Someone who knows when the Firefighter should take the lead, when the Detective needs time to solve the mystery, when the Mentor should guide a new teammate, and when the Relationship Builder is exactly who a customer needs.

Meet the Ringmaster

The Ringmaster isn’t another archetype. The Ringmaster is the leader who brings all of the archetypes together. They don’t expect everyone to think alike or solve problems the same way. Instead, they recognize the unique strengths each person brings and create an environment where those strengths can flourish.

They know when to encourage. When to coach. When to challenge. And sometimes...when to simply get out of the way and let talented people do what they do best.

The Ringmaster measures success not by how brightly they shine, but by how brightly their team shines. Their greatest accomplishment isn’t collecting the largest payment or building the best dashboard; it’s watching a new collector become confident. Seeing a teammate discover a strength they didn’t know they had. And creating a team where every archetype is valued because every archetype has a purpose.

The Ringmaster understands that the magic isn’t in having all Firefighters or all Hunters. The magic lies in bringing together diverse strengths to create one extraordinary team. From the outside, collections can look like organized chaos. From the Ringmaster’s chair...it’s just Tuesday.

Closing Thoughts

The Collection Archetypes started as something fun. Collections can be an incredibly rewarding profession, but let’s be honest, it can also be stressful. That’s exactly why I believe every successful team needs moments of laughter.

Over the years, we’ve had plenty of conversations that started with, “You’re such a Firefighter,” or “Only the Detective would spend an hour tracking down that missing purchase order.” We laughed because we recognized ourselves.

But beneath the humor was something even more important. Respect. Respect for the different strengths each person brought to the team. Great collections teams aren’t built by hiring all people who think alike. They’re built by bringing together people with different strengths who share the same purpose: helping customers, protecting cash flow, and supporting one another.

About the Author:

Teri Chapman is a global Accounts Receivable and Collections leader focused on turning complexity into cash flow. As Global Collections Manager, she oversees a 17-member team and AR operations across EMEA, LATAM, and North America, driving strategy across collections, cash application, and cross-functional alignment. Her efforts have contributed to record-low DSO performance through a combination of process design, targeted account strategies, and operational discipline. She has a history of partnering closely with Finance, Sales, and Executive Leadership to improve working capital, reduce DSO, and create scalable, sustainable processes across multi-entity organizations. She can be reached at chapmanteri10@gmail.com.

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