In this instructional YouTube video, e‑commerce fractional CFO Charles Leikauf explains how businesses can increase the cash they keep on hand without boosting sales by optimizing working capital. He defines the three components of working capital—accounts receivable (AR), accounts payable (AP), and inventory—and shows how extending payment terms with vendors can dramatically reduce the cash needed to operate. Leikauf walks viewers through a practical, repeatable process: list every vendor in a spreadsheet, record current payment days, request credit applications, negotiate longer payable periods, and set phone reminders to revisit terms every six months. By shifting payable days from immediate to 30‑plus days, a company can cut its required cash in half, freeing cash for growth while maintaining the same sales volume.
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Do you want to keep more money in your business without actually really changing anything? So one of the things you can do is called the working capital optimization. Hi, I'm Charles, and I'm a finance expert, and I've helped hundreds of businesses start, grow, and scale fractional CFO firm. And also I've helped hundreds of businesses manage your finances because I'm an e-com fractional CFO. One of the things you can do is called working capital optimization. Working capital is comprised of 3 things: AR, AP, and inventory. Now, AR is the money that people owe you. AP, accounts payable, is the money you owe people. And inventory is, well, inventory. Those are widgets that you have. One of the things that you can do is you can put all of your all the vendors in a list. So put them in a spreadsheet. Better A, better B, vendor C. But how many days you're allowed to pay the vendor? Do you pay them immediately? Do you pay them in 10 days, 5 days, 15 days, 20 days, 30 days, 60, 90? What days do you have an agreement? And then I want you to go to each vendor and ask them for a credit application. And then I want you to ask them for better days payable. And then I want you to provide the detail. I want you to negotiate down. You want you to put the days payable that you have. How many days do you have to pay? Because if you have to pay a vendor instantly but you now have to pay them 30 days later, you can literally cut the amount of money in half that it takes to run your business. So you go and put all those in a sheet, you go through those and you put a reminder in your phone. So you take your phone, you put a reminder in your phone to say, hey, go get better terms. And every 6 months you ask, hey, can I pay you a little bit later? That allows you to be able to run your business with less cash in your bank account. You can decrease the amount of working capital that it takes to run your business, and that's called the working capital optimization.
