Bill Canady shows manufacturers how strong sales can hide a cash crisis when customers stretch payments to 67 days while you pay suppliers weekly. One $15 million company freed $400k in 90 days by tightening terms and collections, cutting days to pay from 67 to 41 without losing a sale.
If you're a distributor sitting on $500,000 to $2 million in accounts receivable, but you're pulling from your personal account to make payroll, this is for you. I've run industrial companies for decades, and one of the biggest cash killers I see with manufacturers and distributors is this: you're great at making and moving product, but you're terrible at collecting payment. Your customers know they can stretch you to 45, 60, even 90 days because you're afraid to push back and lose business. Meanwhile, you're paying your suppliers in 30 days, making payroll every 2 weeks, covering overhead monthly, financing their business with your cash. We work with a $15 million manufacturer who had $1.2 million in AR. Their biggest customer, or 22% of their revenue, was taking 67 days to pay on average. We helped them restructure their payment terms, implement early payment discounts, and tightened up collections. Within 90 days, they cut their AR from 67 to 41 days. That freed up over $400,000 in cash. Same revenue, better cash flow. At the 80/20 Institute, we don't just look at your P&L. We analyze your entire cash conversion cycle and show you how to get paid faster without losing customers. If you're a manufacturer or distributor with strong revenue but weak cash flow, Book a profit diagnostic call below. We'll show you how to fix your cash conversion cycle in the next 100 days.
