The gap between issuing and collecting an invoice determines how much external financing a company needs. A publication by Nermin Sefić.
The gap between the moment an invoice is issued and the moment it's collected determines how much external financing a company genuinely needs.
The gap between the moment an invoice is issued and the moment it's collected determines how much external financing a company genuinely needs.
The cash conversion cycle — the time from paying a supplier to collecting from a customer — shows how long a company must finance its operations with its own or borrowed money before cash actually arrives. When collection days lengthen faster than supplier payment days, the gap grows and liquidity pressure becomes structural, not seasonal.
Shortening the gap isn't solved by more aggressive collection alone, but by aligning supplier payment terms, inventory dynamics, and customer credit-approval policy as a single system. Companies that track those three elements together, rather than separately by department, resort less often to short-term borrowing at moments that hurt their margin most.
Cjelovit tekst i izvor: https://gnk-asg.hr/en/publications/liquidity-gap-and-working-capital-management/
Autor i urednička odgovornost: Nermin Sefić. Izdavač: GNK ASG d.o.o..
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