A profitable business can still run short of cash. Payroll, supplier invoices, VAT and stock commitments do not wait for card settlements, invoice terms or manual reconciliation to catch up. If customer money is sitting in transit for several days, your P&L may look healthy while your bank balance tells a different story.
At Digital Media Technology Solutions, we look at payment acceptance, operational processes and cash flow risk together. Founded in 2016 and based across London and Essex, we use FTSE 250-level procurement leverage to help leadership teams identify where delayed settlement and unnecessary payment costs are putting pressure on working capital.
Turn Sales Into Usable Cash Before Costs Fall Due
Instant settlement means cleared customer funds are made available rapidly, rather than being held within a lengthy payment cycle. In many cases, this can be supported through account-to-account open banking payments, where customers approve a payment directly from their bank account.
"Instant" does not mean controls disappear. Payment flows still need proportionate fraud checks, AML processes, user permissions and reconciliation controls. The objective is simple: reduce the time between making a sale and having spendable cash, without creating new financial or operational risk.
For a growing business, that shorter gap can make a material difference. Faster access to funds may reduce overdraft dependency, improve supplier payment timing and give finance teams more confidence when managing payroll, stock or tax liabilities. We often find that the issue is not one large cost, but a collection of small delays across different payment channels.
Know When Delayed Settlement Is Damaging Cash Flow
Settlement delays are easy to overlook when sales are steady. Pressure usually becomes visible when trading increases, costs rise or a key supplier needs payment before your customer funds have arrived.
Warning signs we recommend reviewing include:
- Card takings held for several days after a sale
- Weekend or bank holiday settlement delays
- Increasing use of overdrafts or short-term borrowing
- Late supplier payments despite healthy sales activity
- Manual reconciliation backlogs and unclear processing fees
Late September is a sensible time to review these issues. As Q4 approaches, many businesses face higher stock commitments, seasonal payroll changes, larger marketing spend and year-end budget decisions. A settlement cycle that worked during quieter periods may not support peak trading.
The pressure point also varies by operating model. Hospitality and retail businesses may receive payments every day but need to manage refunds and supplier bills closely. E-commerce businesses may face a higher volume of transactions and returns. Service businesses may depend on deposits, invoices and recurring payments. Multi-site operators can add another layer of reconciliation and reporting complexity.
Calculate the EBITDA Cost of Slow Payment Settlement
Headline transaction fees rarely show the full cost of taking payments. To understand the EBITDA impact, we recommend looking beyond the merchant service charge and identifying every operating cost linked to a payment journey.
That review should include:
- Merchant service charges, interchange fees and scheme fees
- Gateway, terminal and payment platform costs
- Chargeback administration and refund handling
- Internal labour spent matching payments across systems
- Reconciliation errors, duplicate work and reporting delays
Finance costs caused by delayed access to cash should be assessed separately. Interest on overdrafts, invoice finance or short-term borrowing sits below EBITDA, while delayed settlement can also affect operating cash flow, supplier-payment capacity and net profit after finance costs.
As an illustration, a business processing £2 million annually may compare a conventional card cost of 1.5% with a sub-1% payment option where appropriate. The difference can be meaningful at EBITDA level when lower transaction fees and less reconciliation labour reduce operating costs. Earlier access to cleared funds has a separate cash-flow benefit when it reduces borrowing, supports prompt-payment supplier discounts or prevents stock disruption.
Actual savings depend on payment mix, customer preferences, risk profile, contract terms and integration requirements. Our procurement and cost reduction work focuses on that wider commercial picture, because a lower transaction fee is not useful if it introduces avoidable admin or weakens the customer experience.
Use Open Banking to Receive Funds Faster
Open banking payments allow customers to authorise a payment directly from their bank account. Instead of relying solely on card scheme rails, funds can typically move through UK Faster Payments, helping businesses receive funds faster and reducing reliance on traditional card-based settlement cycles.
For suitable payment journeys, open banking can support sub-1% transaction fees, fewer card-scheme charges and a single integration that can unify more than 100 payment methods. Traditional card chargebacks do not apply in the same way, but that does not remove the need for clear refund policies, dispute handling and fraud prevention.
We see particular value where payment amounts are higher or where speed matters to working capital. This can include:
- Invoice payments and account settlement
- Deposits for services or bookings
- Higher-value e-commerce transactions
- Recurring customer payments
- B2B payment flows with clear references
Cards will still matter for many businesses. Customer preference, international payments and in-person payment acceptance can require a mix of methods. Open banking is often most effective as part of a broader payment strategy, not as an automatic replacement for every card transaction.
Build a Settlement Plan That Finance Can Control
- Map every payment route. Record each payment channel, settlement cycle, fee type, refund process, reconciliation task and system hand-off. This establishes where cash is held in transit and where operating costs are created.
- Calculate the financial effect. Finance should quantify average daily funds awaiting settlement, payment costs that affect EBITDA and borrowing costs that sit below EBITDA. Compare these figures with your cash-flow management priorities, supplier terms and short-term funding requirements.
- Prioritise the highest-value customer journeys. Test where faster settlement will have the greatest effect on working capital, margin protection or operational workload, such as invoice payments, deposits, higher-value transactions or recurring collections.
- Connect payment data to core systems. Integrate payment information with accounting software, ERP, CRM or booking systems through a defined systems integration plan. Teams can then match funds to orders, invoices and customer records with less manual effort, reducing data silos and improving short-term cash forecasting.
- Validate controls before launch. Complete a formal review of safeguarding arrangements, payment flow, fraud controls, user permissions, refund rules, reporting needs and contingency procedures. CFOs need to understand total payment economics, while Ops Directors need confidence that the solution removes work rather than creating another disconnected process.
In an anonymised multi-site hospitality client review, the finance team was receiving daily card takings through different settlement cycles while operations staff reconciled payment reports manually across sites. Mapping the payment routes separated EBITDA costs, including fees and reconciliation labour, from overdraft interest below EBITDA, then identified deposit and invoice journeys where faster settlement would improve working-capital control.
Make Q4 Cash Work Harder for the Business
Q4 is a practical decision point for reviewing settlement delays, supplier commitments and payment acceptance costs. Before peak trading, contract renewals and year-end planning take over, leadership teams should establish whether cash is reaching the business quickly enough to support planned growth.
A focused commercial review should consider payment fees, settlement timing, supplier contracts, operational workflows and systems integration together. That creates a clearer implementation case than treating payments as a standalone finance issue.
The strongest settlement strategy is one that gives finance better control, gives operations fewer manual tasks and turns completed sales into usable cash before business costs fall due.
Reduce Fees and Release Cash Sooner
Digital Media Technology Solutions can assess where card fees, delayed settlement and manual reconciliation are constraining your working capital. See how receive funds faster through Open Banking while reducing transaction costs to sub-1% where suitable. Our team will benchmark the commercial case against your existing payment setup and identify the operational changes required. Contact us to arrange a focused discussion.
