Benefits of knowing your Cash Conversion Cycle score

We discussed ways to make your Cash Conversion Cycle score as good as possible in our previous blog How to shorten your Cash Conversion Cycle. Now that you have an optimised score, let’s look at the benefits to your business.

Get more credit from your suppliers.

Most suppliers rely on the net operating cycle to determine your company’s liquidity value which will be essential in their decision on whether to or not to extend your business's credit.

Evaluating Your Business

The main goal of determining your firm’s net operating cycle is to assess its efficiency in management and operations. When you determine your cash cycle score, you’ll be able to pinpoint areas of your business that may need improvement.

Loan Application

Your company’s cash-to-cash cycle is crucial in determining the amount of cash that you need a financial institution to lend you since it will help you figure out if you can repay the loan you are requesting without defaulting.

Invoice Finance

Knowing how long you need to wait before your customers are paying you is a good way to determine whether invoice finance is right for your business. If you have a regular and recurring time between issuing invoices and being paid, but need cash to fill that gap, invoice finance is a perfectly suited funding option for your business’ needs.

Evaluating Your Competition

You can use the net operating cycle to determine how your company is performing against its competitors. You should be able to find average CCC scores for your industry and will understand what it means if it comes up in conversation at industry events or in conversation.

Having access to working capital really is key to investing in the future of your business. If you need to shorten your Cash Conversion Cycle and get liquidity for growth or new business, invoice finance could be the funding option you’re looking for.

Read more on our Cash Conversion Cycle series
1. How to calculate your Cash Conversion Cycle score
2. What your Cash Conversion Cycle score means
3. How to shorten your Cash Conversion Cycle
4. Benefits Of Knowing Your Cash Conversion Cycle score

At Optimum Finance, we utilise innovative technology to offer a range of flexible funding solutions, which grow alongside your business. Get an instant estimate for the amount of funding you could access with our finance calculator. Products include invoice discounting and factoring that can boost your cashflow and give you access to a dedicated credit control team.

Email or call us to speak to our experienced team of experts and find out how invoice finance could help your business. We pride ourselves on getting things done quickly and providing access to cash within 24 hours of approval. We are passionate about finding solutions and delivering to clients’ needs.