Are Healthcare Businesses Leveraging Working Capital More Efficiently Than Yours?

In today’s increasingly interconnected and digital world, it’s never been better to be a business.

But that doesn’t mean it is any easier to be one. And for today’s businesses looking for a little certainty amid an unknowable macro backdrop, working capital innovations are emerging not as lifelines but as strategic floodlights, opening the aperture on opportunity by offering flexibility and choice.

With the news Monday (Oct. 28) that Extend has introduced a feature that allows businesses to streamline invoice payments with virtual cards, unlocking the potential of working capital innovation is top of mind for forward-thinking firms.

PYMNTS Intelligence’s “2024-2025 Growth Corporates Working Capital Index,” commissioned by Visa, identified the ways businesses are adopting digital solutions to optimize cash flow and drive growth in a competitive global market. The data indicates that over 80% of CFOs and treasurers have utilized working capital solutions, marking a 13% increase year over year.

This uptake highlights how targeted financing tools are allowing businesses to capitalize on growth opportunities, streamline operations, and improve cash flow in an era defined by economic uncertainty.

And in a complex global landscape, companies that prioritize working capital strategies stand to benefit from more than just cash flow stability. They gain resilience, operational flexibility, and the ability to seize market opportunities — all of which are vital for success in a rapidly evolving world.

But the data also showed that some sectors are gaining more from working capital, and doing more with it, than their peer industries.

Read more: Solving the Working Capital Goldilocks Paradox: 3 Best Practices for CFOs

Industries Benefiting Most From Working Capital Innovation

The impact of working capital innovation varies significantly across industries, but according to this year’s Working Capital Index, growth corporates within healthcare, agriculture, retail and other sectors all experienced distinct benefits.

The data showed that working capital top performers pay 77% more of their invoices before they are due than bottom performers, 27% of growth corporates using working capital collected payments faster and 26% of growth corporates using working capital paid suppliers faster.

Healthcare saw the largest relative uptick in working capital efficiency, with a 10.2% increase compared to a cross-sector baseline of 7%. Driven by regulatory demands and high patient volumes, healthcare organizations often face elongated revenue cycles due to insurance claim delays and the high upfront costs of medical equipment and facilities. Access to reliable working capital is essential for healthcare providers to address these financial pressures, allowing them to manage operational costs more effectively while ensuring timely payroll and equipment procurement.

Agriculture also experienced a 9.4% increase in working capital efficiency, marking it as another sector quickly adopting these solutions to manage its unique cash flow needs. The industry’s inherent seasonality and sensitivity to environmental factors make cash flow consistency a significant challenge. Working capital solutions provide agriculture businesses with the liquidity they need to purchase supplies, pay wages and handle equipment costs — even during off-seasons when revenue is lower.

“Farmers spend a lot of money, and nobody’s really focused on a tool set that serves the farmer,” Jake Joraanstad, CEO at Bushel, told PYMNTS.

Across regions and industries, more than 7 in 10 financing users report improved buyer-supplier dynamics and 68% report being better able to meet customer demand and take advantage of opportunities because they accessed financing.

See also: From Cash Flow to Growth Engine: How Growth Corporates Rethink Working Capital

Unlocking Operational Agility Through Working Capital

Still, when it comes to working capital, education is crucial. The innovation is more of a strategic tool than a tactical just-in-time solution.

And despite the prevalence and growing adoption of working capital solutions like virtual cards, in order to leverage a solution, firms must know how to get what they want from it. PYMNTS Intelligence found that the fleet and mobility (42%), manufacturing and construction (47%), professional and facility services (44%), as well as healthcare (34%) sectors are more likely to view virtual cards primarily as payables-only tools. This industry-driven perception could reflect an uneven distribution of availability of virtual cards with revolving credit options or it could reflect a need for tailored education efforts to increase awareness.

This view was also shared more widely among Latin America and the Caribbean (LAC) and North American businesses, at 34% and 30%, respectively, relative to Europe and CEMEA regions. The index benchmark was 27%.

“The key is to be proactive,” Lauren Hewings, head of working capital solutions at Visa, told PYMNTS. “With the right strategies in place, middle-market corporates can leverage working capital not just to survive but to thrive in a competitive global market.”

As more businesses recognize the potential of virtual cards in managing working capital and automating payments, the marketplace may see adoption rates rise further in the coming years.

Read the full report here: 2024-2025 Growth Corporates Working Capital Index