This year’s Best Use of Payables Finance award went to Phillips 66 for its debut early payment programme in partnership with MUFG, which judges praised for being strategically sound, supplier-centric and highly scalable. Thanks to internal tech investments, cross-functional collaboration and a phased, dual-track approach to supplier outreach, the programme has ramped up quickly and comfortably exceeded the US energy company’s targets for financial optimisation, supplier engagement and long-term cultural change.
Holistic transformation
Phillips 66 launched its early payment programme in 2024 as part of an enterprise-wide Business Transformation initiative. A benchmarking exercise against industry peers revealed that the company’s payment terms – which it had held steady for over 50 years – had an opportunity for improvement.
Phillips 66 used this as an opportunity to modernise and future-proof its payment practices, starting with the US. It set out to extend its payment terms to align with its peers, many of whom had successfully extended their payment terms over time. And through a partnership with MUFG, it simultaneously custom-built a flexible early payment option to allow suppliers to access faster, advantaged funding at rates below their existing carry costs.
Innovative rollout
Judges were particularly impressed by the rollout of the early payment programme, with Phillips 66 employing an innovative dual-track, campaign-based strategy that has proven both agile and sustainable.
By onboarding suppliers in phases – with a new round of supplier communications launched every 30 days – Phillips was able to ramp up quickly while also managing risk at every stage, maintaining compliance and minimising business disruption.
The dual-track model also allowed Phillips 66 to onboard the majority of suppliers at scale while engaging strategic suppliers directly. So far, more than 6,000 suppliers have enrolled.
Discipline and data
Judges flagged Phillips 66’s disciplined and data-driven approach to project planning and implementation as a key success factor. For example, to refine supplier communications, test process controls and confirm system readiness, programme launch was preceded by a tightly controlled pilot that included 150 suppliers.
Internal tech investments then helped Phillips 66 fine-tune the programme as it progressed. The development of an online dashboard offering real-time visibility into supplier adoption, discount trends, cost savings and campaign milestones meant senior leaders could make agile, data-driven decisions.
Financial and cultural wins
The programme has comfortably exceeded its first-year targets related to working capital efficiency, free cash flow generation, cost savings and supplier liquidity. As the programme matures, Phillips 66 projects a net positive cash flow position with no deterioration in its days payable outstanding (DPO).
The programme has also delivered softer but equally important wins for Phillips 66, in the form of stronger supplier relationships and an internal culture boost. Supplier adoption rates and feedback are impressive. And Phillips believes the design, implementation and rollout process has helped embed a continuous improvement culture throughout the firm.
For example, the early payment programme triggered a change in how Phillips 66 teams collaborate. Robust sponsorship from the CFO and heads of Treasury, Procurement, IT and Agile Enterprise Services had already cemented the programme as a broad strategic priority. A top-down and bottom-up change management strategy then saw Treasury, Accounts Payable, Procurement, IT, and Field Operations engaged early and often through weekly stakeholder reviews to develop the campaign strategy, implement supplier outreach, and ensure system readiness. This enabled nimbler decision-making and buy-in at every level, and helped foster a culture of shared accountability that will now feed into other projects.
A replicable framework
Extending the programme to suppliers of recently acquired companies, such as DCP Midstream and Coastal Blend, has also helped drive alignment across business units as Phillips 66 continues to evolve. This has further demonstrated the programme’s replicability, which is now being prepped for an EMEA launch.
“With its first-ever early payment programme, Phillips 66 has demonstrated how a tightly coordinated, cross-functional approach to working capital transformation can deliver strategic benefits that extend far beyond Treasury,” said Mike Hewitt, CEO of the Working Capital Forum. “Its commitment to innovation – especially around supplier engagement – has helped it create a highly replicable model that will be welcomed by the entire WCF community.”
Brian Millls, Head of Phillips 66 Procurement Data & Analytics, said the firm was ‘truly honoured’ to accept the Award
‘This recognition is for the incredible team at Phillips 66, in partnership with MUFG, who made this achievement possible. Our goal has always been to create solutions that strengthen supplier relationships, improve liquidity, and drive sustainable value across the supply chain. Winning this award validates the hard work, collaboration, and innovation that went into building a programme that benefits all stakeholders. This award inspires us to push boundaries and strive for continuous
improvement by finding new ways to optimise working capital.”