It's one of the most frustrating paradoxes in business: you have customers, you have sales, you have profits on paper, but the bank is always tight. The answer almost always lies in cash management and working capital.
What is working capital?
It’s the money your company needs to finance its daily operations. The difference between what your customers owe you (accounts receivable), what you have in inventory, and what you owe your suppliers (accounts payable).
If your customers pay you in 60 days but you pay your suppliers in 30 days, you have a 30-day gap that someone has to finance. That someone, almost always, is you: with your own cash.
The cash conversion cycle
It’s the time that passes from when you spend money on your operation until you recover it from your customers. The longer it is, the more capital you need to operate. The shorter it is, the more efficient your business is.
Reducing this cycle (collecting faster, paying on reasonable terms, turning over inventory efficiently) is one of the most powerful ways to free up cash without needing to take out a loan.
A real example
Daniela has a manufacturing company. Her big customers paid in 90 days. Her raw material suppliers demanded payment in 30 days. She needed to grow but had no cash to do it.
We worked on three fronts: we negotiated confirming with her main bank so suppliers could collect earlier without Daniela having to pay earlier, we implemented early-payment discounts for customers who could accelerate, and we optimized the inventory level she maintained.
In four months she freed up the equivalent of three months of operating expenses. Without taking out a single new loan.
What MOVA does
We analyze your operating cycle, identify where your money is trapped and build a concrete plan to free it up. More cash, same operation.
