Receivables and payables
Speeding inflows begins with accounts receivable: stricter credit policies, electronic invoicing, automated dunning, and incentive structures such as dynamic discounting accelerate collections and reduce days sales outstanding. On the outflow side, lengthening accounts payable through negotiated terms or approved payment schedules raises days payable outstanding and preserves cash. Combining these with supply chain finance or reverse factoring can extend supplier payment terms while offering suppliers earlier liquidity at competitive rates. These moves improve immediate cash but carry consequences: suppliers may face margin pressure, and overly aggressive stretching of payables can damage relationships, especially where local business norms favor prompt payment. In many emerging markets longer informal credit cycles and weaker contract enforcement amplify these trade-offs.
Inventory, finance, and treasury
Reducing inventory and its days inventory outstanding through demand forecasting, SKU rationalization, and vendor-managed inventory directly releases working capital and reduces waste. Coupling inventory optimization with supply chain finance or warehouse-finance solutions preserves supplier health while lowering on-balance-sheet inventory. Centralized treasury automation and cash pooling increase visibility and allow rapid redeployment of freed cash across territories, improving resilience to seasonal or regional shocks. Environmental and territorial nuances matter: lean inventories lower obsolescence and environmental waste, but in geographies with long lead times or fragile transport networks, too-lean policies can amplify shortages and social costs.
Implementing these levers requires clear governance, reliable data, and alignment with procurement and commercial teams; Jonathan Berk and Peter DeMarzo stress that policy changes must reflect firm risk tolerance and strategic goals. The most effective accelerators are those that combine receivables acceleration, inventory reduction, and payables optimization with targeted finance products and treasury automation—delivering faster cash conversion while managing supplier relationships and operational risk. Short-term cash gains should therefore be weighed against long-term supply resilience and reputational effects.