Debtors who pay late. Inventory that doesn't move. Suppliers paid too fast. The working capital cycle is where profitable businesses quietly bleed cash — and where a CFO with the right lens can unlock crores without a single new sale.
Every day a customer delays payment, you're financing their business with yours. Debtor days of 60–90+ are common in Indian SMEs. Shrinking them by 15–20 days can unlock months of operating cash.
In manufacturing and trading businesses, 15–25% of inventory is typically dead, slow-moving or obsolete — carrying cost, warehouse space and capital that could be redeployed. Most owners know it exists but haven't quantified it.
Many businesses pay suppliers immediately or within a few days — often because nobody has renegotiated payment terms. Extending creditor days by 15–30 days, without damaging relationships, is free working capital financing.
The Cash Conversion Cycle (CCC) = Debtor Days + Inventory Days − Creditor Days. It tells you how many days your cash is tied up before it comes back to you. The lower the number, the better.
Many Indian SMEs have a CCC of 60–120 days. Best-in-class businesses in the same industry run at 30–45. That gap represents crores of cash sitting idle in the business cycle.
We calculate your current CCC, benchmark it against industry, and build a 90-day action plan to close the gap — with specific interventions across receivables, inventory and payables.
A mid-size manufacturer with strong revenues but persistent cash pressure — always needing working capital loans despite being profitable.
The problem: The business was profitable on paper but perpetually short of cash. The promoter assumed it was a growth problem. A working capital diagnostic told a different story: debtor days were 78, inventory days 94 — and 22% of inventory hadn't moved in over 12 months.
What we did: Built a full working capital map — SKU-level inventory ageing, customer-level debtor analysis, supplier payment benchmarking. Identified ₹1.8 Cr in dead inventory, ₹80 L in overdue debtors with no follow-up, and ₹40 L in supplier over-payments. Redesigned the collection process and introduced an inventory rationalisation plan.
The outcome: Over 6 months, ₹3 Cr+ was freed from the working capital cycle. The business reduced its CC loan limit by ₹2 Cr — saving ₹24 L annually in interest. Debtor days fell from 78 to 52.
Book a free 30-minute Cash Flow Diagnostic. We'll calculate your CCC, benchmark it to industry and tell you where the first ₹1 Cr is hiding — in one conversation.