The report, "Cash and Liquidity Management," surveyed 325 senior finance executives at mid-size companies in the U.S. to understand how these firms are currently managing their cash flow, as well as their priorities and plans for improving cash management and working capital in the next few years.

"Mid-size companies can be vulnerable to economic swings, making cash flow management key to their ongoing stability and growth," said Darryl Brown, President, Americas, Global Corporate Payments, American Express. "In a tight financing environment, access to liquidity can make the difference between simply enduring an uncertain recovery versus taking advantage of opportunities to move your business forward."

Cash Flow is Critical

More than half of senior finance executives (56 percent) report that cash from retained earnings (cash derived from operations) has been their companies' major source of growth capital over the past three years.

-- Less than one-quarter (24 percent) relied on secured or unsecured debt financing

-- Just 8 percent relied on equity financing

This focus on cash will intensify in the years ahead. A large majority of finance executives (78 percent) say that cash from ongoing operations will be their companies' primary source of growth capital over the next two years. Just 14 percent of respondents disagreed with this sentiment.

Smarter Cash Management

When senior finance executives were asked which changes would contribute most to their ability to manage cash flow effectively, the leading choices were:

-- Motivating account-relationship holders to help with collections (40 percent)

-- Increased use of electronic payments (38 percent)

-- Improving the timeliness and accuracy of cash forecasting (30 percent)

Finding Reliable Financing

Senior finance executives are also focused on securing reasonably priced, reliable sources of short-term financing.

-- Commercial bank financing is the most common method, with 58 percent of respondents using it frequently or occasionally.

-- This category is followed closely by "float" realized through corporate credit cards, charge cards or procurement cards, with 55 percent of respondents using this method frequently or occasionally.

"The research reveals that mid-size companies are relying on various payment methods, such as electronic payments and commercial cards, to help boost their cash flow," continued Brown. "That's the right move. Companies that increase adoption of these payment methods not only improve their working capital, but can increase the visibility and control of their payments, reduce costs and improve their accounts-payables process overall."