Photo provided by DepositPhotos
The Hackett Group's 2025 U.S. Working Capital Survey put $1.7 trillion in excess working capital across the 1,000 largest U.S. publicly traded nonfinancial companies, a sum equal to 35% of gross working capital and 11% of aggregate revenue. The figure usually gets described as a warehouse problem. The survey's own breakdown starts somewhere else.
Accounts receivable holds the largest share at $600 billion
Hackett found accounts receivable now accounts for the largest slice of excess working capital, an opportunity worth $600 billion, driven by an 18-day gap in days sales outstanding between top-quartile and median performers. Days sales outstanding degraded for a second consecutive year as customers pushed for extended payment terms.
People are also reading…
Much of the cash, then, is sitting with customers who have not paid. Which raises a sharper question for anyone running a product business: Does the stockroom still deserve the attention?
A 37-day average conceals which lever actually moved
The headline number improved. Hackett recorded a 4% gain in the cash conversion cycle, down to 37 days, after a year of broad deterioration. The composition is narrower than the average suggests. Almost all of the rebound came from a 3% gain in days payable outstanding, which reached 59 days. Days sales outstanding and days inventory outstanding both worsened slightly.
Companies got better at paying suppliers later. Collection speed and stock turnover stayed flat or slipped.
The consequences show up sharply at the extremes. Hackett reported computer hardware and peripherals suffered a 182% decline in cash conversion cycle performance, driven by overproduction and inventory buildup amid AI-fueled demand and trade policy uncertainty.
Days inventory outstanding moves without a counterparty's consent
Collecting faster means renegotiating with customers. Paying later means leaning on suppliers. Both depend on parties with their own incentives, and Hackett's data shows the payables gap between top-quartile and median firms already sits at 9%.
Inventory answers to the operation that owns it. Shrinking days inventory outstanding starts with current counts rather than reconciled ones, which is the visibility most operations lack when stock levels live in spreadsheets updated after the fact. That gap is what real-time inventory tracking across locations closes, replacing periodic counts with live ones and generating purchase orders automatically once quantities fall below set reorder points.
84% of firms sourcing inputs abroad report higher costs
The Federal Reserve's 2026 Report on Employer Firms, drawn from the 2025 Small Business Credit Survey of 6,525 firms with fewer than 500 employees, found rising costs were by far the top financial challenge. Forty-eight percent of respondents sourced at least some inputs from outside the United States, and 84% of those firms reported those inputs now cost more. Of that group, 76% passed along at least part of the increase and 60% absorbed at least part.
Firms absorbing higher input costs tie up more cash per unit of stock than they did a year earlier, at the same turnover rate.
Cash freed by turning stock faster carries operational cost, but no interest rate and no credit decision. The same Fed survey found 60% of firms that applied to online lenders said borrowing costs ran higher than expected, and 38% of employer firms still carry more than $100,000 in debt. Working capital released internally competes against that price.
Finance leaders ranked working capital their top priority for the year
Working capital has historically been a quarterly reporting exercise. Hackett's survey found finance leaders now rank working capital optimization as their top priority for the year, which the firm described as a change from years past. That places inventory accuracy, long treated as an operations concern, on the finance agenda.
The Fed survey points to where the capacity might come from. Forty-six percent of small employer firms reported using AI in some form, most often for writing or marketing and for individual productivity. Inventory forecasting did not appear among the common uses. Among the 33% of firms with no plans to adopt AI, more than half said the reason is that it does not apply to their business.
