Cash Flow
How long does a dollar stay out of your hands?
The problem
Inventory, receivables and payables are usually managed by three different people with no shared measure of how long cash is tied up.
Why it matters
The cash conversion cycle is the single clearest measure of how much cash your business model requires to operate. Shortening it funds growth without a lender.
How to know if you have this
- Three separate teams optimizing three separate numbers
- Inventory rising while receivables also rise
- No shared target for how long cash should be committed
- Growth always requires outside money
How Advisory Motion solves it
- 01Calculate the full cycle and its three components with consistent definitions
- 02Model what each component is worth in released cash
- 03Set one shared target across sales, operations and finance
- 04Track it monthly as a single headline metric
Illustrative example
62 days to 47 days
A wholesaler cut fifteen days out of the cycle across inventory policy and collections. That released roughly $340K — more than the expansion they had been planning to finance.
Illustrative composite · not a client identification
Where this connects