Lockup is the combination of your Work In Progress (WIP) and Debtors.  It is the amount of days taken to convert your WIP and your Debtors (Receivables) into Cash.

It is calculated by combining the two measurements:
 

Debtors (Receivables) - money owed to you

http://www.mcnamaraandcompany.com.au/blog/the-importance-of-having-good-control-of-your-debtors

To improve Debtors you could:

•      Have clear terms of trade.
•      Make Payments easier.
•      Issue statements property on overdue accounts.
•      Issue letters / followed by phone call advising the client / customer of the overdue account.

Work In Progress (WIP) - Work that has been done but not invoiced

http://www.mcnamaraandcompany.com.au/blog/what-is-the-financial-measurement-work-in-progress-wip-days-or-stock-days-and-how-is-it-calculated

To improve your WIP you could:

•      Communicate to the client / customer what is required to complete the task / engagement.
•      Issue interim accounts.
•      Issue invoices promptly at the end of the engagement.

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.