Napoleon Bonaparte once famously said ‘An army marches on its stomach’. This also holds true for a business except in this case the food is cash. A healthy Cash Conversion Cycle (CCC) is vital to a business’s performance and success.

Below are some of the things that effect your CCC and overall Cashflow.

For business that trade in goods:

1. When goods are ordered with suppliers. 

2. Time required for the goods to be received by the business.

3. How long the goods are held for – Stock on Hand. 

4. Time required to have the goods ready for dispatch. 

5. Time taken to prepare invoice and deliver to customer.

6. The time required to collect money from customers

For businesses that trade in services:

1.  The time that a project or letter of engagement is finalised.

2.  The times that staff are paid for the completion of this project / engagement.

3.  The time taken to complete the project / engagement. How long is the Work in Progress held for.

4.  Time taken to deliver / present project / engagement to customer.

5.  Time taken to prepare invoice and deliver to customer.

6.  Time taken for the customer to pay their invoice

If you would like to discuss further please contact us:
 McNamara & Company - Chartered Accountants, located minutes from the Melbourne CBD
 www.mcnamaraandcompany.com.au/contact-us
 Phone +61 3 9428 1062
 Email admin@mcnamaraandco.com

Please refer to disclaimer at the bottom of the page.