After 2023’s “triple down” year, when all major working capital metrics deteriorated across corporate America, The Hackett Group’s latest findings present a mixed but revealing view of last year’s working capital performance.
According to Hackett’s 2025 U.S. Working Capital Survey, provided exclusively to CFO.com, aggregate days sales outstanding worsened for the second year in a row. However, beneath that trend, some industries made dramatic strides in collecting cash faster while others extended payment terms to support growth.
The report, which analyzed 2024 data from 1,000 of the largest nonfinancial public companies in the U.S., found that biotechnology, industrials and retail were among the fastest-paid sectors, with double-digit percentage reductions in DSO. On the other end, semiconductors, telecom equipment and other capital-intensive industries saw steep DSO increases as strategic customers negotiated longer payment terms.
Interest rates pushed finance to move faster
Hackett analysts called 2024 a “course correction” year, as companies worked to unwind the cash flow pressures of 2023. With interest rates still elevated last year (the federal funds rate hovered between 4.25% and 4.50%) many finance leaders likely had to grapple with the high costs of borrowing due to trapped capital.
“Cash flow optimization should be the top priority on the corporate agenda,” the report stated, noting that working capital performance rose to the top objective in Hackett’s executive survey, up from the seventh spot the previous year. Tightening collections became a competitive edge for CFOs whose companies were less reliant on a few powerful customers with the ability to demand extended terms.
Biotech firms improved DSO by 12%, the largest decline among all industries, driven by stronger order-to-cash discipline and reduced customer leniency. Industrials and retailers followed closely, with 11% and 9% DSO improvements, respectively. For retailers in particular, the gains reflected a return to fundamentals as pandemic-era volatility faded and high interest rates encouraged shorter terms.
At the heart of the AI infrastructure boom, the semiconductors and equipment sector saw its DSO rise by 17%, the steepest increase in more than a decade. That jump was not the result of weak collections, but rather a strategic tradeoff.
Chipmakers offered extended payment terms to large customers — often large hyperscalers or AI infrastructure buyers — in exchange for long-term supply agreements and capacity guarantees. While those deals fueled a 28% increase in revenue, they drove average collection time up to 57 days, the highest DSO deterioration seen by researchers in 13 years.
Why DSO strategy still matters, even for legacy industries
While high-growth sectors leaned on flexible terms to boost top-line performance, more traditional industries took mixed approaches to collections, often with mixed results.
The utilities sector saw DSO rise 3%, as commercial and industrial receivables increased. Even with strong EBITDA margins (36%), slower collections created added friction in the cash cycle. Similarly, computer hardware and peripherals posted a 6% DSO increase, reflecting inventory buildup tied to AI demand and precautionary stocking ahead of possible tariffs.
Some legacy industries bucked the trend. Pharmaceuticals reduced DSO by 5%, from 74 to 70 days, supported by stronger product demand and factoring programs. Textiles, apparel and footwear improved by 2%, aided by full-price sales and improved forecasting.
These changes matter. Hackett estimates that accounts receivable now represent 35% of total excess working capital — the single largest source of trapped cash. The total working capital opportunity across receivables, inventory and payables stands at $1.7 trillion. With the cost of debt still high, improving DSO can mean the difference between self-funded growth or borrowing at a premium.
CFOs that failed to manage receivables effectively in 2024 likely faced slower cash inflows or higher interest expenses. Those that moved quickly gained liquidity, flexibility and margin resilience. Per the Hackett data, as uncertainty continues, getting paid faster is more than just an efficiency metric. It’s a reflection of leverage, discipline and resilience.
