Accelerating The Cash Conversion Cycle With Supply Chain Finance

Businesses across manufacturing, consumer goods, commodities, and industrial sectors are facing heightened volatility, from shifting payment behaviors and rising operating costs to global supply chain disruptions that strain working capital. For many mid-market and enterprise companies, the difference between growth and stagnation comes down to the speed and efficiency of the cash conversion cycle (CCC). The time it takes to turn operational expenses into cash collected directly affects whether a business has the liquidity to stay competitive, invest in growth, and weather economic uncertainty.

Accelerating the CCC frees trapped working capital, improves cash flow forecasting, and strengthens operational resilience. By shortening the CCC, companies convert investment in inventory, labor, and materials into liquid capital more quickly, supporting growth initiatives without adding balance-sheet leverage. Mid-market and enterprise companies are increasingly adopting flexible supply chain finance (SCF) solutions to optimize the cycle, unlock liquidity, and strengthen supplier networks in ways that traditional credit lines cannot match in speed, scale, or control.

Below, we explore the strategic significance of CCC management and share three real-world case studies showing how companies across industries leverage flexible SCF programs to optimize cash flow, strengthen supplier relationships, and support growth initiatives.

Why the cash conversion cycle matters

An accelerated CCC provides strategic liquidity, enabling finance teams to free trapped cash, improve forecasting, and manage supplier and customer payment timing effectively. Focusing on this strategy helps companies to:

• Improve working capital by accelerating cash conversion from receivables and payables, gives finance teams more liquidity to deploy strategically.
• Extend buyer-side liquidity responsibly by paying invoices up to 60 days past terms, allowing companies to optimize cash flow without disrupting supplier payment operations.
• Stabilize supplier relationships through Early Pay, enabling suppliers to receive payment immediately when combined with terms extension programs.
• Scale operations without adding leverage, as SCF grows with AP/AR volumes.
• Reduce financial risk from extended buyer or supplier terms.
• Enhance forecast accuracy and covenant management through integrated visibility and control.

Industries with long receivable cycles, significant upfront costs, long overseas shipping timeframes, or reliance on large buyers, such as manufacturing, trucking, distribution, staffing, healthcare, and commodities, gain the most from strong CCC performance. Traditional bank finance often falls short due to slow approval, inflexible structures, and limited visibility into supplier cash flow. For these industries, private credit via supply chain finance provides a controllable, scalable liquidity solution that aligns with operational cash flow timing and supports growth objectives – offering an alternative to borrowing on your ABL facility or term debt.

How Early Pay and FlexTerm accelerate CCC

SCF, particularly Early Pay and FlexTerm gives finance leaders precise control over payment timing, supplier liquidity, and working-capital velocity, helping accelerate cash conversion from both ends of the balance sheet:

• FlexTerm extends buyer-side payment timing responsibly, improving cash flow forecasting and freeing capital for strategic initiatives without compromising supplier trust – inherently keeping your cash longer and increasing your DPO.
• Early Pay accelerates supplier cash conversion, allowing suppliers to receive immediate payment. In this arrangement, suppliers decrease their DSO while buyers retain cash longer, strengthening supplier relationships and ensuring operational continuity.
• Combined, these levers compress the CCC, enhance liquidity predictability, reduce financial risk, and provide finance teams with greater control over working-capital deployment.

Real-world proof: How SCF solves liquidity challenges

To understand the true impact of an effective cash conversion cycle, it helps to see how SCF performs in actual enterprise operations. The following three case studies highlight how companies across different industries, each facing extended payment terms, rising costs, or supplier cash flow strain, used flexible supply chain finance solutions to stabilize liquidity, protect relationships, and fuel continued growth. These examples demonstrate how SCF can turn cash management from a reactive problem to a proactive financial strategy.

Case study #1 – Strengthening exporter networks

A U.S. commodity exporter faced longer payment cycles and supplier-cash flow strain, as traditional bank-led financing programs proved difficult to access. To support the exporter and its network of suppliers across 17 states, a public-private partnership leveraged Export‑Import Bank of the United States (EXIM) guarantees with private-sector execution for scalable liquidity.

eCapital, Huntington, and EXIM structured a US$200 million supply-chain-finance facility backed by EXIM’s guarantee program. With advance rates up to 95%, the exporter preserved cash flow, extended payment terms, and ensured that segmented suppliers maintained payments on their preferred terms via early payments.

Results and benefits included:

• Maintained liquidity during extended terms and improved cash conversion.
• Gave suppliers reliable, faster access to cash, strengthening relationships and trust.
• Reduced operational and financial risk across the supply chain.
• Preserved uninterrupted production, shipments, and more than 700 jobs.
• Program scalability demonstrated resilience across the broader supply chain.

This collaboration has now become a model for strengthening supply chains, protecting jobs, and supporting U.S. exports in uncertain times.

Case study #2 – Supporting growth

Compana, a leading pet-care manufacturer, faced mounting pressure from suppliers who required prompt payment. At the same time, the company needed to extend payment terms to optimize its cash conversion cycle (CCC) and support growth initiatives. Balancing these competing needs put pressure on liquidity and operational flexibility.

To address this, Compana partnered with eCapital to implement a tailored supply chain finance (SCF) program. The solution provided real-time visibility into invoices, available credit, and repayment schedules, while giving the company flexibility to optimize working capital by paying suppliers later, all the while suppliers are guaranteed payment on time or even access to same-day funding.

The SCF facility offered:

• Real-time visibility: Buyers and suppliers can monitor invoices, available credit, and repayment schedules.
• Immediate supplier payments: Same-day funding options strengthen supplier relationships and ensure operational continuity.
• Flexible, scalable funding: The facility adapts to evolving business needs, supporting growth and cash flow predictability.
• User-friendly interface: Streamlined workflows simplify reconciliation and financial management for the internal finance team.

As needs evolved, the facility expanded to support Compana’s growth, offering scalable funding, operational resilience, and improved liquidity management. According to Jeff Harper, Corporate Controller, “our suppliers are never more than three clicks away from a screen confirming they’ll receive cash the same day.”

Through the program, Compana extended payment terms without disruption, enhanced supplier relationships, , and gained a clearer snapshot of its liquidity and business health.

Case study #3 – Streamlined financial processes

Industrial Scrap Processors, Inc. is a family-owned scrap-metal firm based in Bessemer, Alabama. This 42-year-old company found itself in a cash flow crunch when one of its largest buyers, a major steel mill customer, extended payment terms, first to 45, and then to 90 days. Meanwhile, the company was still paying its suppliers on 30-day terms and handling hauling and delivery costs, creating a costly mismatch.

To address this challenge, Industrial Scrap Processors turned to eCapital and enrolled in its SCF program, which gave the business control to draw funds as needed rather than waiting for traditionally delayed payments.

The impact was immediate:

• Immediate access to cash allowed uninterrupted operations and stabilized the business.
• Suppliers were paid promptly, strengthening relationships and reducing supply chain risk.
• Profitability remained intact, even with extended buyer terms.
• Streamlined AP/AR workflows simplified reconciliation and reporting for the accounting team.

As Chief Information Officer, Melissa Merritt noted: “The steps to request payments are intuitive, and it’s a simple process to reconcile invoices from eCapital to our accounting system.”

The intuitive platform and responsive support enabled Industrial Scrap Processors to maintain supplier relationships, continue operations, and protect profitability – even as payment terms shifted. FastTrack® gave finance leaders flexibility and control over working capital, bridging gaps between receivables and payables while supporting ongoing operational needs.

The common thread: Flexible liquidity drives stability

Across these diverse industries and challenges, one common theme stands out: an accelerated cash conversion cycle is achievable when SCF is strategically implemented.

Benefits across the case studies include:

• Optimized timing of payments, improving working capital efficiency and liquidity predictability.
• Stronger supplier relationships through timely and reliable payments.
• Improved payment transparency, giving finance teams greater control and insight.
• Scalable liquidity aligned with AP/AR volumes, reducing dependence on restrictive credit lines.
• Enhanced forecasting and scenario planning, supporting better financial decision-making.

Whether managing extended terms, funding growth or optimizing supplier payments, companies using SCF solutions can convert cash faster, reduce financial strain, and build more resilient operations.

Conclusion

As globalization deepens and markets become increasingly interconnected, payment behavior is becoming increasingly unpredictable. Companies that excel at managing their CCC gain a sustainable competitive advantage. These operations are better prepared, more resilient, and more capable of seizing opportunities even in turbulent conditions. In a business environment where cash flow has become a strategic asset, supply chain finance is emerging as a critical engine of operational strength and long-term success.

By leveraging flexible supply chain financing, as shown in these case studies, businesses can accelerate CCC, protect profitability, and ensure continuity across their supply chains.

Contact us to learn how eCapital can strengthen your cash flow, support your suppliers, and deliver the financial flexibility your business needs to grow with confidence.

Key Takeaways

• For many companies, cash conversion cycle (CCC) speed determines liquidity, growth capacity, and operational resilience.
• Businesses are increasingly turning to flexible supply chain finance (SCF) solutions to optimize CCC, unlocking liquidity, and strengthening supplier networks in ways traditional banking programs often cannot match.
• This article features three case studies that demonstrate how flexible SCF programs can convert working capital into a strategic enabler for growth and operational stability.