By Andy Lilley, Managing Director, Global Invoice to Cash, BlackLine
Many firms are helping clients navigate inflation, supply chain volatility and high interest rates, but one metric that remains underutilized in those conversations is the cash conversion cycle (CCC). CCC captures how long it takes a business to convert inventory purchases into cash receipts. And while profitability and revenue often dominate boardroom metrics, CCC can reveal deeply embedded inefficiencies that directly affect a client’s liquidity and resilience.
Recent data from The Hackett Group shows the average CCC for U.S. companies rose to 37.7 days in 2023, marking a 3.6% deterioration. That increase translates to an estimated $1.8 trillion in untapped working capital. In a tightening economic environment, this isn’t just a missed opportunity—it’s a silent risk.
Why CCC Still Flies Under the Radar
CCC isn’t always top of mind because it’s a composite metric that ties together days sales outstanding (DSO), inventory and days payables outstanding (DPO). Responsibility for those components is often split across departments, making ownership ambiguous. But with tighter credit and slower growth, it’s increasingly important for finance professionals to bring CCC into strategic discussions with their clients.
Clients may not realize how much working capital is unnecessarily trapped in receivables or inventory. Even profitable businesses can run into cash problems if customers take 70 days to pay or if inventory turnover is sluggish. CCC surfaces those issues early and holistically.
Shrinking DSO With Automation
Reducing DSO is one of the most direct ways to accelerate cash flow. Yet many businesses are still managing receivables with manual processes that cause delays, errors, and poor customer experiences.
According to Kevin Permenter, senior research director, IDC, “Automating AR processes not only accelerates cash flow but also reduces errors and enhances customer relationships, positioning your business at the forefront of financial management innovation.” These tools prioritize high-risk accounts, standardize follow-ups and accelerate dispute resolution. For accountants advising clients, recommending automation doesn’t just mean efficiency—it means unlocking cash that might otherwise sit idle for weeks or months.
For example, a mid-size manufacturer might use automation to shift from weekly to daily billing, auto-send reminders when invoices are overdue, and reduce invoicing errors that commonly stall payments. These simple changes can move the needle on collections without altering client relationships or requiring major system overhauls.
Payables Discipline in a Post-Supply Chain World
On the payables side, DPO has been compressed for many businesses due to tighter supplier terms. After years of stretching payments to improve cash flow, clients now face pressure to pay earlier. For accountants, that means helping clients manage outflows strategically.
One overlooked tactic is aligning payables to inflows—avoiding supplier payments that precede customer payments. Encouraging clients to optimize terms without defaulting to delays can help maintain vendor trust while preserving liquidity. Some firms are also layering on AP automation to improve invoice accuracy and timing, ensuring clients pay on terms without human error driving early disbursement.
This approach is even more effective when supported by intelligent AR tools. With clearer insight into when payments are likely to come in, businesses can time their outgoing payments more precisely. This helps accounts payable teams plan around expected cash and gives treasury better control over working capital. Accurate forecasts from AR strengthen the entire finance function by linking receivables data to smarter, more deliberate payables decisions.
Unlocking Working Capital Without Full Overhauls
Clients often assume they need a full ERP transformation to improve cash flow. In most cases, targeted interventions are more effective. For instance, aligning sales and finance on consistent customer payment terms, addressing inventory imbalances, or cleaning up order-to-cash processes can quickly surface value.
CPAs and advisors can add value by auditing these workflows and identifying areas for near-term improvement. Is billing lagging behind shipment dates? Are dispute resolutions tracked and managed? Does the firm know which clients consistently pay late and why? These are practical entry points that don’t require a complete system rebuild. All of this is underpinned by accurate data and intelligent systems that help teams pinpoint inefficiencies and take action faster.
Why the Return of Checks Hurts Progress
One final hurdle: a resurgence in paper check usage. A 2025 AFP survey found that 91% of US businesses still use checks, up from 75% the year before. While checks may feel familiar or even safer to some, they are the most fraud-prone form of payment and a significant drag on working capital.
Manual processing slows collections, extends DSO and creates operational friction. Helping clients shift toward digital payments not only reduces fraud risk but also speeds up the cash conversion process, improving visibility and predictability.
Final Thought
Cash flow remains king, but many clients are looking in the wrong places for improvements. CCC should be elevated in every working capital conversation. By shrinking DSO, optimizing payables and eliminating inefficient payment methods, clients can boost resilience without waiting for a broader transformation. CPAs and advisors are uniquely positioned to guide these conversations—and to help clients unlock liquidity that’s already within reach.
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Andy Lilley is Managing Director of Global Invoice to Cash at BlackLine, where he works with leading companies to modernize finance operations. He has two decades of experience advising organizations on optimizing cash flow and working capital. Learn more at www.blackline.com.
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