The cash conversion cycle is determined by subtracting the average payment period for accounts payable from the combined average collection period for accounts receivable and the inventory holding period. This calculation provides insight into the time a company takes to convert its operational inputs into cash. A shorter cash conversion cycle suggests more efficient management of working capital and improved liquidity.
Reimagine Your Order-To-Cash with AI
Touchless Receivables. Frictionless Payments.
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Emagia is a leading provider of AI-powered Order-to-Cash (O2C) automation platform that modernizes finance operations for midsize to large global businesses. Many global businesses and shared service centers use Emagia’s Enterprise Receivables Management System to transform to digital world-class operations in credit, invoicing and payments, receivables, collections, deductions, cash application and cash forecasting. Emagia solutions improve their customers DSO, cash flow, credit risk, operational cost, compliance and profitability.
