See how long your cash is tied up in stock and unpaid invoices, and where you could free some up, using five figures from your management accounts.
The number of days between paying your supplier for stock and your customer paying you for it. For that whole time, your cash has left the business and none of it has come back yet.
Profit isn't cash. The faster you grow, the more cash sits in stock and unpaid invoices before the revenue arrives, so a profitable brand can still run short. A shorter cycle means less to borrow and less equity to give away to fund the same sales.
Totals for the 12 months to your latest month end.
Pre-filled with example figures, so replace any you have. Add balances from 12 months ago and we'll average them with your latest ones, or leave that column blank. You can type 350k or 1.2m.
60
Each time you buy stock, that cash is gone for about 60 days before a customer pays you. Most of that time is your stock sitting before it sells.
Cash tied up
£450k
Stock + owed to you − owed by you
Typical for brands
30–90 days
Yours is in range
Paid 10 days sooner
£100k
Back in your account if customers paid you faster
Days inventory outstanding
How long stock sits
Average £300k stock ÷ £1.83m COGS × 365
60
Days sales outstanding
How long customers take to pay
Average £300k receivables ÷ £3.65m net sales × 365
30
Days payable outstanding
How long you take to pay suppliers
Average £150k payables ÷ £1.83m COGS × 365
30
Cash conversion cycle = 60 + 30 − 30
60
Net sales and cost of goods sold need to be above zero, and the balance sheet figures 0 or more.
Order closer to what sells, so stock spends less time in the warehouse.
Agree shorter terms with retailers and wholesalers, or get paid early on the invoice.
Agree longer terms with suppliers, or fund the purchase order so they're paid on time and you pay later.
Choose the amount, repayment type and length of term that match your production lead-times and supplier terms.
Remove the cash flow headache of long payment terms with your customers, get 100% of the invoice value instantly.
Illustrative only, not financial advice. Funding subject to credit checks. Capital provided by Triffin Capital Limited, registered with the FCA, company number 16268227.
Funding subject to credit checks, approval, underwriting and our lending criteria. Capital provided by Triffin Capital Limited, registered with the FCA, company number 16268227.
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United Kingdom
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European Union
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United States
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