Free Tool
How Long Is Your Cash Stuck in Your Business?
Every dollar you spend on inventory or work takes a trip before it comes back as cash. This calculator shows how long that trip takes, and how much of your money is out on the road right now.
Profitable on Paper, Tight in the Bank
If you have ever looked at a good month on your P&L and a thin bank balance on the same day, this is why. Profit and cash run on different clocks. Profit counts a sale the moment it happens. Cash shows up only after the marketplace pays out or the invoice clears, and it left your account weeks earlier when you bought the inventory.
The gap between those two clocks is your cash conversion cycle. It is the number of days each dollar spends locked up in stock on a shelf or a sale you have not been paid for yet. The longer the cycle, the more cash your business needs just to stand still, and the more a growth push strains your account before it ever helps it.
Three levers shorten it. Hold less inventory by ordering smaller and more often. Collect faster through tighter terms, immediate invoicing, or faster payout options. Pay suppliers later by negotiating longer terms once you have a track record with them. None of these requires heroics. Most businesses we look at can find 10 to 15 days without touching their product or their prices.
The calculator above uses estimates, which is a fine place to start. Your books hold the real answer, down to the SKU and the customer.
FAQ
Questions We Hear a Lot
Your cash conversion cycle is the number of days between paying for inventory or work and getting that money back from a customer. It is calculated as inventory days plus collection days, minus the days you take to pay suppliers. The shorter the cycle, the less cash your business needs to operate.