The invoice went out on the 30th. The work finished on the 3rd.

Debtor days are measured from the invoice date: which conveniently hides the one stretch of the cash cycle that needs no permission from a customer to shorten.

By Steve 5 min read
Abstract bridge artwork for The invoice went out on the 30th. The work finished on the 3rd.

Most businesses that worry about cash worry about collection. The aged debtor report is printed, the overdue accounts are ranked, someone is given the unpleasant job of ringing them. All of which is reasonable, and all of which addresses the second half of the problem while leaving the first half unexamined, because the first half doesn’t appear on any report. The cash cycle on a piece of work has two distinct stretches. The first runs from the moment the work is delivered to the moment the invoice is raised. The…

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