The real cost of a 45-day cash conversion cycle

Ask most founders how their business is doing and they'll point to revenue. Ask them how much cash sat idle in receivables and inventory last quarter, and you'll usually get a pause. That gap — between watching the top line and watching the cash conversion cycle — is where a lot of otherwise healthy businesses quietly bleed.

The cash conversion cycle (CCC) measures how long it takes for a rupee spent on raw material or operations to come back as cash in the bank. The longer that cycle, the more working capital gets tied up.

What a 45-day cycle actually costs you

Every extra day in your cash cycle is a day your own money is funding someone else's business.

Three levers that move the needle within 90 days

• Segment customers by actual payment behavior, not credit terms on paper.
• Make collections a weekly discipline, not a monthly scramble.
• Renegotiate supplier terms deliberately, not by default.

Cash conversion problems rarely show up as a crisis until they're serious, because revenue keeps climbing the whole time — the P&L looks fine even as the balance sheet quietly deteriorates.