Finance
Cash Conversion Cycle (CCC)
How many days between paying for inputs and receiving cash from customers — Days Inventory + Days Sales Outstanding − Days Payables Outstanding.
CCC measures how much working capital your business needs to finance daily operations. A shorter cycle means less cash tied up in inventory and receivables; longer means you're financing growth out of the owners' pockets or short-term debt.
Critical for e-commerce, manufacturing, distribution, and any business with inventory. Service businesses without inventory still track DSO − DPO as a simplified version.
Lenders use CCC to size working-capital lines of credit.
Common pitfalls
- Optimizing inventory and DSO but ignoring DPO — paying vendors too fast wastes free financing
- Forgetting that supplier credit terms can be negotiated — net-30 isn't a law
- Not measuring CCC by customer segment — large-customer DSO can hide concentration risk
Related service
Visit relevant serviceHave a Cash Conversion Cycle (CCC) situation in your business?
We'll show you how this applies to your specific facts — and scope a plan if you want us to handle it. Fixed monthly fee, tailored to your needs.
Talk to a partner