Your Working Capital Holds More Answers Than You Think

Most businesses watch their cash flow like a weather forecast—waiting to see what happens. We help you read the patterns behind the numbers and actually do something about them.

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Cash Flow Problems Don't Announce Themselves

Here's what usually happens: a business owner notices they're chasing payments more than usual. Maybe they delay an equipment purchase. Perhaps they renegotiate with a supplier for the third time this year.

These aren't just inconveniences—they're symptoms. The underlying issue often sits in how working capital moves through the business. Not how much money comes in, but when it arrives, where it pools, and what gets trapped in inventory or outstanding invoices.

We've worked with manufacturing operations holding R2 million in finished goods nobody ordered this quarter. We've seen service companies with 90-day collection cycles wondering why payroll feels tight every month.

The pattern repeats because most financial reports show you what happened last month. They don't explain why your available cash dropped even though sales increased.

Financial analysis workspace showing working capital reports

What Actually Gets Measured

Our approach involves tracking the movement of working capital across three operational zones. Each one reveals different pressure points.

Conversion Cycles

How long does it take to turn R1 of invested capital into R1 of collected revenue?

Days inventory outstanding
Days sales outstanding
Days payable outstanding
Cash conversion cycle calculation

Longer cycles mean more capital sits frozen in operations instead of being available for strategic decisions.

Liquidity Ratios

Can the business meet short-term obligations without scrambling?

Current ratio against industry benchmarks
Quick ratio for immediate liquidity
Working capital turnover efficiency
Operating cash flow coverage

These metrics show whether you're operating with a buffer or living paycheck to paycheck at the corporate level.

Structural Drains

Where does working capital leak out systematically?

Seasonal cash flow patterns
Inventory obsolescence rates
Customer concentration risks
Supplier dependency analysis

Sometimes the problem isn't poor management—it's a business model that structurally demands more working capital than the revenue cycle can support.

Detailed financial analysis charts and data visualization

The Four-Phase Analysis Process

Current State Mapping

We pull three years of financial data and operational records. Not just year-end statements—monthly cash flow, AR aging reports, inventory turnover by product line. The goal is to understand your actual working capital cycle, not the theoretical one.

Constraint Identification

Most businesses have 2-3 primary bottlenecks restricting working capital efficiency. Could be collection practices, could be inventory management, could be payment terms that don't match revenue timing. We isolate these through comparative analysis.

Scenario Modeling

What happens if you reduce average collection time by 15 days? What if you renegotiate supplier terms to NET 45 instead of NET 30? We model the working capital impact across different operational scenarios before you change anything.

Implementation Support

The analysis is only useful if it leads to operational changes. We work with your finance and operations teams to implement the specific adjustments identified during modeling—then track results for at least one complete business cycle.

Real Situations We've Worked Through

These aren't success stories in the traditional sense. They're examples of businesses that faced specific working capital challenges and the adjustments that helped.

Thandi Nkosi

Manufacturing Operations

Thandi's precision machining company had consistent orders but persistent cash pressure. The analysis revealed their working capital cycle was 87 days—nearly three months between purchasing raw materials and collecting payment. Their largest client paid on NET 90 terms while they paid suppliers at NET 30.

We modeled several scenarios including inventory reduction, revised payment terms, and invoice factoring. The company implemented staggered supplier payments aligned with customer cash receipts and reduced safety stock based on actual lead time analysis rather than historical practice.

Outcome: Working capital cycle reduced to 62 days within six months. The company didn't dramatically increase revenue, but freed up approximately R840,000 in previously trapped capital.

Naledi Mokoena

Retail Distribution

Naledi operated a wholesale distribution business with thin margins and high inventory turnover requirements. The challenge wasn't slow collections—it was carrying inventory for products with highly seasonal demand patterns. Every October through December, working capital requirements spiked dramatically.

Our analysis identified that 23% of their SKUs accounted for 71% of the seasonal working capital demand. We worked with their procurement and warehouse teams to implement just-in-time ordering for fast-moving seasonal items and reduced depth of stock for slower products.

Outcome: Peak season working capital requirements decreased by 34%. The business maintained service levels while significantly reducing the cash required to carry seasonal inventory.

Getting Started With Your Analysis

The initial assessment takes about two weeks. We'll need access to financial statements, AR/AP aging reports, and inventory records. From there, we can usually identify the top 2-3 working capital constraints affecting your operation.

Business financial planning and working capital optimization process

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