Management Consultancy · Service
Shortening the cash conversion cycle
DSO, DPO and DIO — and which one is actually yours to move.
At a glance
What it is
“Everyone attacks receivables because it is the line everyone understands. It is rarely the one that is yours to move.”
A principal, Kaelo Management Consultancy
What’s included
Four areas of scopeDecompose before you target
DSO, DPO and DIO separately, and by customer and product where the mix varies. A blended cycle hides the fact that one segment is funding another.
Receivables: policy against practice
The gap between stated terms and actual collection is usually process rather than creditworthiness — invoices raised late, disputes unresolved, nobody owning escalation.
Inventory: the one you control
Days inventory outstanding is the component most within your own gift and the one most often left alone because it means confronting service-level assumptions.
Payables without damaging supply
Extending payables is the easiest lever and the most dangerous. In a constrained supply market, a supplier who deprioritises you costs more than the working capital released.
How the work runs
Decomposition
The cycle broken out properly, by segment.
Constraint identification
Which component is actually movable.
Targeted programme
With owners, and the trade-offs stated.
Cadence
Reviewed on a rhythm rather than as a project.
When to come to us
- 01 Growth is consuming cash faster than it generates it.
- 02 A previous receivables push produced a temporary improvement that reversed.
- 03 Nobody can state your cash conversion cycle from memory.
What we do not do
- Recommending payment-term extensions that would damage supply in a constrained market.
- Advising on financing instruments, invoice discounting or facilities — that is regulated financial advice and sits outside this licence.
- Treating a one-off collections push as a structural fix.
Related reading
Tender design, carrier selection and cost baselining — as method, not as phases. →
Whether the business will still be there in three years. →
How the family decides — not what it signs. →
For large owner-led enterprises: rebuilding the pricing, channel and product architecture that lifts turnover without eroding margin. →
Common questions
