Gary Youssef’s Post

With operating and supplier costs rising, you may have to pass some of that burden on. So, how do you raise prices – and how do you communicate a change in price to your customers? https://lnkd.in/ejDhit5X #BusinessPlanning #businessowner #sme #futureplanning #wealthmanagement

💡Understanding the Cash Conversion Cycle and Its Impact on Supply Chain Finance💡 Ever wondered how quickly your business converts investments into cash? Enter the #CashConversionCycle (CCC)! This vital metric helps businesses measure efficiency in managing inventory and receivables. Here’s a quick breakdown: 🔹 Days Inventory Outstanding (DIO): The time inventory sits before being sold. A lower DIO means quicker sales! 📦 🔹 Days Sales Outstanding (DSO): The average days to collect payment after a sale. Reducing DSO ensures faster cash inflow! 💵 🔹 Days Payables Outstanding (DPO): The time taken to pay suppliers. A higher DPO allows businesses to hold onto cash longer! ⏳ How Can Supply Chain Finance (SCF) Help? 🔍 Enhances DIO: SCF improves inventory management, reducing excess stock and speeding up sales. ⚡ Reduces DSO: SCF facilitates faster invoicing and incentivizes quicker customer payments. 🤝 Extends DPO: SCF enables better negotiation terms with suppliers, allowing longer payment periods without damaging relationships. In today’s fast-paced business environment, optimizing your Cash Conversion Cycle with Supply Chain Finance is essential for financial health and growth! 🚀 #CashConversionCycle #SupplyChainFinance #BusinessGrowth #Liquidity #FinancialManagement #WorkingCapital

Here are 3 strategies to reduce your Working Capital Requirement (WCR) by optimizing your #inventory 👇🏻 But first, let's refresh our memory: what exactly is #WCR? It's a measure of a company's ability to finance its operations without relying on additional external funding. Calculation goes like this: WCR = Current Assets - Current Liabilities Why aim for a lower WCR? 🤔 A lower WCR indicates that the company requires less working capital to fund its day-to-day operations. This suggests effective cash management and efficient handling of stocks, accounts receivable, and short-term debts. Now, let's explore how you can make adjustments to your inventory to free up cash: 1️⃣ Prevent overstocking: Stockpiling goods ties up capital, increases the risk of depreciation, and demands additional financing. 2️⃣ Boost inventory turnover: Measure how often your total stock is sold within a year. Higher turnover rates lead to better cash flow. Speeding up order processing and delivery reduces the time products sit in stock. 3️⃣ Identify dead items: Spot unsold items and take action to move them. Consider promotions or selling to clearance outlets. Using an #inventorymanagement solution helps streamline these processes. Ready to implement these strategies?

Cash Conversion Cycle (CCC) is a metric that indicates how long it takes a company to convert cash spent on inventory from the sale of its product or service back into cash. Cash Conversion Cycle (CCC) measures in days the time it takes the company to sell its inventory, the time it takes the company to collect receivables, and the time the company can pay invoices. It is preferable to have a short cash cycle, as it indicates less time that cash is tied up in accounts receivable or inventory. This metric is strictly connected to the average industry. A manufacturing industry will certainly have a different Cash Conversion Cycle (CCC) than a service company. Analyzing the Cash Conversion Cycle (CCC) gives a clear view of whether a company has problems with collecting AR invoices (long DSO), with inventory (long DIO) or tends to pay suppliers late (long DPO). Predictive power: MEDIUM Formula Cash Conversion Cycle (CCC) = (DIO + DSO) − DPO where: DIO = Days of inventory outstanding DSO = Days sales outstanding DPO = Days payables outstanding #Finance #Investment #Credit #Risk #RiskManagment #Industry #Cash #Revenue #Invoice #Bank #Accounting

When suppliers get early payments on invoices - what's the best approach to pricing? Auctions, lowest cost, some kind of market price? Here is a simple framework that corporate treasurers and CFOs can use to decide. The right strategy depends on the objectives of the supplier financing program. PrimaTrade's digitization platform for the financial supply chain is award-winning and offers unparalled flexibility for corporate treasurers and CFOs - enabling working capital and days payable outstanding (DPO) to be managed dynamically across the enterprise. Join over 500 companies that already trust us to digitize their financial supply chains and their supplies, saving 1%+ on the cost of the goods involved. This post follows some very interesting discussions last week with corporate treasurers and CFOs about both existing and planned supply chain finance programs at the excellent IQPC Group Treasurers' Exchange conference in London. https://lnkd.in/eSAW7azf #workingcapital #supplychainfinance #dynamicdiscounting #supplierfinance

2️⃣0️⃣2️⃣5️⃣ 🍾 is 112 days away! Do you need help with budgeting next year's shipping costs 🚢🏗️🚛📦 With 2025 just around the corner, now is the perfect time to plan your shipping budget. The upcoming NMFTA Docket changes could significantly impact your base rates and add complexity to processing freight documents, but these are not the only factors to consider. The LTL market has undergone significant shifts in recent months, following the Yellow Chapter 11 bankruptcy and the closure of many smaller carriers. Carriers are now better equipped to assess their profitability, and pricing has stabilized, at least for the short term. However, it's important to anticipate significant General Rate Increases (GRIs) in the near future. Additionally, a sudden economic downturn could lead to increased capacity, but it's also possible that more carriers may struggle to stay afloat. Moreover, alternative modes like FTL and multi-stop FTL could become more economical, offering potential savings on loading and unloading costs. It's crucial to be prepared for these evolving market dynamics. Freight4Less can help you: - Analyze your shipping needs: To identify potential cost-saving opportunities. - Develop a resilient shipping strategy: That can withstand market fluctuations. - Negotiate favorable rates: With our extensive carrier network. Don't wait until it's too late. Let's discuss your shipping needs and explore how Freight4Less can help you navigate the complexities of the 2025 shipping landscape. Here is my Calendar Link https://lnkd.in/gvumV_Ac just choose a time and we can meet online! https://lnkd.in/gE-tATEu 

Alex Krutz nailed it on the head here...longer payment terms and VOI as well as uncertainty around delivery times have created challenges for suppliers. And another thing not mentioned is the impact of higher interest rates...the long cash conversion cycle is putting a strain on cash flow as well as profitability. The opinion goes on to suggest some initiatives to help address these challenges, which is appreciated as most just spell out the problems without offering solutions. The most important of those, in my opinion, are the last two...re-address the contract terms with the customer (they need you as much as you need them), and make sure you price accordingly, which includes pricing in higher interest costs on the line of credit, when looking at new work statements. I presented a similar list of challenges during a "banker roundtable" with some of the larger aerospace customers here in Wichita. I sensed that they were listening and are willing to help.

- *Extended Payment Terms*: Buyers can negotiate longer payment terms with suppliers, keeping cash in the business longer. - *Supply Chain Stability*: Ensuring that suppliers are financially stable can lead to a more reliable supply chain. - *Potential Cost Savings*: Suppliers may offer better pricing or terms in exchange for early payment, leading to cost savings for the buyer. #SupplyChainFinance #DataInsights #WorkingCapital #CreditRisk #FinancialInclusion #SMEs #Innovation #EthicalFinance #SCF #creditPlus

Understanding the Cash Conversion Cycle (CCC): A Key Metric for Working Capital Management The Cash Conversion Cycle (CCC) measures how efficiently a company manages its working capital by tracking the time between purchasing inventory and collecting cash from sales. A shorter CCC is better for liquidity—it means less capital is tied up in daily operations. How to Calculate the CCC: The formula is: DIO + DSO - DPO • DIO (Days Inventory Outstanding): How long inventory is held before it’s sold. (DIO = (Average Inventory ÷ COGS) × 365) • DSO (Days Sales Outstanding): How long it takes to collect cash from customers. (DSO = (Average Accounts Receivable ÷ Credit Sales) × 365) • DPO (Days Payable Outstanding): How long the company takes to pay its suppliers. (DPO = (Average Accounts Payable ÷ COGS) × 365) What’s a Good CCC? • Great: < 0 days (cash collected before suppliers are paid). • Good: < 30 days. • Average: 30–90 days. • Bad: 90+ days.

📅 Metric Monday: Unraveling Days Sales Outstanding (DSO) 🧐 🔍 This week's spotlight: Days Sales Outstanding (DSO). A vital KPI that measures the average number of days it takes for a company to collect payment after a sale. Calculate it as (Accounts Receivable / Total Credit Sales) × Number of Days. 💡 Why DSO matters: It's a window into your cash flow efficiency. A lower DSO means quicker collection, enhancing your liquidity. A higher DSO can signal slow-paying customers or inefficiencies in your collection process. 🎯 Optimal DSO: While dependent on industry norms, a lower DSO is generally preferred as it indicates faster cash conversion, vital for operational efficiency and financial agility. 🔎 Keep your DSO in check to ensure your business isn't just earning revenues on paper but is also swiftly converting those revenues into cash! #MetricMonday #DSO #CashFlowManagement #FinancialHealth #BusinessAccounting https://cstu.io/ef3fde