For many B2B businesses, the way you get paid can have just as much impact on your financial health as how much you get paid. In today’s economy. That’s why understanding how virtual cards reduce DSO and accelerate cash flow is more important than ever.
The longer it takes for a company to collect payment, the more pressure it puts on cash flow and reinvestment opportunities.
But what if you could get paid faster without sacrificing cost?
That’s where virtual cards come in — offering the potential to reduce your DSO and access capital faster at a competitive net effective cost. If you’re evaluating ways to optimize working capital, virtual cards can help
Why Reducing DSO Matters for Cash Flow
DSO is the average number of days it takes to receive payment after a sale is made. A high DSO means your cash is tied up in receivables — which limits your ability to reinvest, cover payroll, or seize growth opportunities.
For example, if your current DSO is 45 days and you’re doing $1 million per month in receivables, that’s $1.5 million in capital locked up at any given time. One benefit of virtual cards is their ability to improve DSO without adding complexity
How Virtual Cards Improve DSO and Speed Up Payments
With a properly structured virtual card program, you can:
- Get paid on invoice or within 15 days
- Eliminate manual processing delays from check, ACH, or wire
- Accelerate your receivables by 20–30 days
- Offset the cost of faster payments through interchange rebates or net cost structures
Instead of waiting 30–60 days, you may get access to funds within days — giving you a major cash flow advantage.
What’s the Cost of Money Tied Up in DSO?
You may be thinking, “But what’s the cost to accept virtual cards?”
Let’s flip the question — what’s the cost of not getting paid for 30, 45, or 60 days?
Use this formula to estimate:
(Receivables Amount) x (Interest Rate or Cost of Capital) x (DSO/360) = Cost of Float
For example:
- $500,000 in receivables
- 8% cost of capital
- 45 DSO
= $500,000 x 0.08 x (45/360) = $5,000 lost per cycle
If you could cut DSO in half, you’d recover $2,500 per month in working capital cost — not counting the business impact of faster cash reinvestment.
Final Thought
Virtual cards aren’t just a payment method — they’re a tool to transform your cash flow. The key is structuring them the right way to ensure the cost is competitive, and the value is maximized.
Curious to see how virtual cards reduce DSO and accelerate cash flow , let’s talk. We will show you the math and let you decide.
888 790 3450 or email info@ revolution-payments.com