Businesses Struggle to Adapt as Late Payments Surge, Tariffs Reshape Costs, Report Reveals

Why It Matters

Extended payment terms and tariff pressures strain liquidity, forcing companies to adopt defensive cash‑management while still investing in technology to sustain competitive advantage.

Key Takeaways

• Invoice payment cycles lengthening, two‑thirds see delays
• 70% postpone or cancel major projects due to uncertainty
• 85% implement tariff mitigation strategies like pricing adjustments
• 65% allocate ≥10% of budgets to AI and automation
• Workforce cuts and hiring freezes affect over a third

Pulse Analysis

Late payments are reshaping corporate cash flows, with two‑thirds of finance leaders reporting slower customer remittances than six months ago. This trend, combined with heightened tariff‑related expenses, is prompting firms to adopt stricter cash‑handling policies and defer capital‑intensive initiatives. The pressure to preserve liquidity is driving a shift toward defensive financial planning, where explicit tariff allowances are now embedded in 2026 forecasts and supply‑chain strategies are being localized to mitigate cost volatility.

At the same time, investment in artificial intelligence and process automation remains robust. Sixty‑five percent of companies intend to allocate at least 10% of their budgets to AI, and 15% plan to exceed a quarter of total spend. Executives cite tangible benefits such as improved predictive analytics, fraud detection, and faster invoice processing, yet nearly six in ten worry about a potential AI spending bubble. The dual focus on discipline and innovation reflects a belief that technology can unlock efficiency gains essential for navigating uncertain markets.

Workforce dynamics are also evolving. Over a third of firms have reduced staff levels, and hiring freezes affect nearly a quarter, prompting a reliance on AI tools to fill capability gaps. Finance teams are adopting more dynamic forecasting, with 78% reviewing projections quarterly or more frequently, and many moving toward real‑time scenario modeling. These adjustments underscore a broader strategic pivot: combining tighter cash management with advanced analytics to build resilience and maintain competitive strength in a volatile economic landscape.