Cash Flow
Every day of receivables is a day of your money financing someone else
The problem
Invoicing is treated as an administrative task rather than a cash function, and aging reports get reviewed only when things get tight.
Why it matters
At $5M of revenue, each day of DSO is roughly $13,700 of cash. Ten days is a six-figure loan you are making to your customers at no interest.
How to know if you have this
- Invoices go out weekly rather than on completion
- Nobody follows up until an account is 60 days old
- Terms vary by customer without a policy
- Disputes are discovered at collection time, not delivery time
How Advisory Motion solves it
- 01Measure DSO and the dollar value of each day for your revenue level
- 02Fix the invoicing trigger so billing happens at the event, not the calendar
- 03Install a simple aging cadence with named ownership at 15, 30 and 45 days
- 04Set a terms policy for new customers based on credit and margin
Illustrative example
Nine days, $123K
A specialty contractor moved invoicing from Friday batches to same-day on completion and added a 15-day follow-up. DSO fell nine days, releasing about $123K of permanent working capital.
Illustrative composite · not a client identification
Where this connects