Cash Flow Gap Calculator
Find the gap between when you pay your suppliers and staff and when your customers pay you. This calculator shows the cash conversion cycle in days and the working capital tied up in that gap — so you can see exactly how much faster collections would release.
Your working capital
Average number of days your customers take to pay you.
Average number of days you take to pay your suppliers and staff.
Optional — leave at 0 for most service businesses that hold no stock.
How the cash conversion cycle works
The cash conversion cycle measures how long your cash is locked up before it returns to you. It is the days it takes to sell inventory (DIO) plus the days customers take to pay (DSO), less the days you take to pay your own suppliers (DPO). The wider that gap, the more working capital you must fund out of your own pocket while you wait to get paid.
When the gap is positive, you are effectively financing your customers — paying staff and suppliers well before the money comes in. When it is negative, your suppliers are financing you, because you collect from customers before your own bills fall due.
This calculator is for illustrative purposes only — not financial advice. It uses simple averages and a 365-day year, and ignores seasonality, financing costs, and tax. Seek advice from a qualified accountant before making working-capital decisions.
What the cash flow gap really costs you
Every business with a positive cash gap is financing its own growth. You pay wages, rent, and suppliers on their schedule, but you collect from customers on yours — and the slower they pay, the more cash sits frozen in your debtor ledger. That tied-up capital is money you cannot use to take on new work, pay down debt, or weather a quiet month.
Why a smaller gap means more cash
The gap is measured in days, and each day is worth roughly one day of revenue. Narrow the gap and that cash is released straight back into your account — without raising prices, taking on a loan, or selling more. Cutting days sales outstanding (DSO) is usually the quickest win, because it is the one lever you control directly through your collections process.
Collections is the fastest lever
Tighter payment terms, prompt invoicing, and firm follow-up on overdue accounts all pull your DSO down. Where customers simply will not pay, escalating early protects the cash you have already earned. Merion recovers commercial debts on a commission-only basis, turning your aged receivables back into working capital. For overdue interest, use the Late Payment Fee Calculator.
This is an indicative calculation only — not financial advice. It uses simple averages and a 365-day year, and does not account for seasonality, financing costs, or tax. Seek advice from a qualified accountant before making working-capital decisions for your business.
Turn slow payers into working capital.
Commission-only recovery — no recovery, no fee. We chase the overdue accounts stretching your cash gap so you get paid sooner.
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