In e-commerce, goods and money are circulateting very fast. This volatility is reflected in the cash flow. A major concern of financial planning for e-commerce companies is to optimize their liquidity by optimizing the so called cash conversion cycle (CCC).

Cash Conversion Cycle

The CCC indicates, how fast a company can turn its warehouse stock (or other outgoing payments) back into incoming payments cash.

The simple rule is: The shorter a company can keep the CCC, the better its liquidity. This is a real challenge, but especially in e-commerce it can be very successful strategy. Companies like Amazon even have a negative cash conversion cycle. This means that Amazon will pay its suppliers only after Amazon has received money from their clients through online sales.

The handling of warehouse stock is very important to the cash flow as well. Although a good warehouse stock guarantees short delivery times for the customer, it causes ongoing costs. The goods in stock are ‘dead capital’ and depending on when the suppliers have to be paid, long term storage will negatively affect your cash flow and working capital.

Reasons why flowpilot pays off for e-commerce businesses

Always up to date

flowpilot understands the volatility of your business. It helps you to update your cash flow planning practically every day!

Always in control

With flowpilot you get to know the performance your cash flow better and better. With these learnings you will become an expert in keeping your business financially fit

Detect and eliminate risks

The AI based flowpilot forecasting is able to identify and eliminate cash flow risks at an early stage.

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