--- title: "What Is the Cash Conversion Cycle (CCC)?" url: https://www.uncap.com/glossary/cash-conversion-cycle author: "Denis Dyli" published: 2026-10-28 updated: 2026-10-28 summary: "The cash conversion cycle (CCC) is a working capital measure, in days, of how long cash is tied up between paying for inventory and collecting from customers. Microsoft Business Central and Infor LN documentation both add days inventory outstanding and days sales outstanding, then subtract days payable outstanding. Infor calls the same measure cash-to-cash cycle time." --- # What Is the Cash Conversion Cycle (CCC)? > The cash conversion cycle (CCC) is a working capital measure, in days, of how long cash is tied up between paying for inventory and collecting from customers. Microsoft Business Central and Infor LN documentation both add days inventory outstanding and days sales outstanding, then subtract days payable outstanding. Infor calls the same measure cash-to-cash cycle time. **Cash conversion cycle**: The cash conversion cycle (CCC) is a working capital measure, in days, of how long cash is tied up between paying for inventory and collecting from customers. Microsoft Business Central and Infor LN documentation both add days inventory outstanding and days sales outstanding, then subtract days payable outstanding. Infor calls the same measure cash-to-cash cycle time. ## How it works The cash conversion cycle (CCC) adds how long inventory sits and how long customers take to pay, then takes off the time your suppliers give you to pay. Microsoft's documentation for the Business Central Power BI Finance app gives the formula as: CCC = days sales of inventory + days sales outstanding - days payable outstanding - Days sales of inventory (DSI): (inventory / cost of goods sold) x number of days. Infor's documentation calls it days inventory outstanding. See inventory turnover ratio. - Days sales outstanding (DSO): (accounts receivable / revenue) x number of days. See days sales outstanding. - Days payable outstanding (DPO): (accounts payable / cost of goods sold) x number of days. See days payable outstanding. Infor's documentation for Infor LN Analytics Foundation writes the same measure as cash-to-cash cycle time = days sales outstanding - days payable outstanding + days inventory outstanding. ## Lower vs. higher, and negative The formula shows what moves the result: - Lower CCC: less time in inventory, faster customer payment, or paying suppliers later all reduce the number of days cash is tied up. - Higher CCC: slow-moving stock, slow-paying customers, or paying suppliers sooner all add days. - Negative CCC: when days payable outstanding is larger than days inventory plus days sales outstanding, the result drops below zero. In that case, on average, customers pay before the business pays its suppliers. This is general information, not financial or accounting advice. ## Example A building products distributor looks at one year (365 days): - Inventory: $600,000 against cost of goods sold of $4,380,000, which is $12,000 a day. DSI = $600,000 / $12,000 = 50 days. - Accounts receivable: $500,000 against revenue of $7,300,000, which is $20,000 a day. DSO = $500,000 / $20,000 = 25 days. - Accounts payable: $360,000 against $12,000 a day of cost of goods sold. DPO = $360,000 / $12,000 = 30 days. CCC = 50 + 25 - 30 = 45 days. If the distributor cut DSO from 25 to 20 days, CCC would fall to 50 + 20 - 30 = 40 days. ## On Shopify On Shopify, the receivables side of the cycle starts with the terms you give B2B buyers. Shopify B2B runs on the Basic, Grow, Advanced and Shopify Plus plans. - Payment terms: the available terms are net 7, net 15, net 30, net 45, net 60, and net 90, and all terms start from the day the order is placed. - Deposits: deposit requirements, partial payments, and payment requests per fulfillment are available only on the Shopify Plus plan. Customers need to pay the deposit amount when they place an order at checkout. - Supplier side: Shopify purchase orders list the products, quantities, costs, payment terms, and supplier details for an order. ## How Uncap helps [Uncap Connect](/products/connect) is the real-time data layer between Shopify, your ERP, and the warehouse floor. Inventory, orders, customers, and pricing move the moment they change, not in an overnight batch. ## Related terms - Days sales outstanding - Days payable outstanding - Inventory turnover ratio - Accounts receivable - Order to cash ## Sources - Microsoft Learn: Power BI Finance app KPIs and measures (Business Central) - Infor LN Analytics Foundation: Cash-to-Cash Cycle Time - Shopify Help Center: Payment terms for B2B ## Frequently asked questions ### What is the formula for cash conversion cycle? In Microsoft Business Central and Infor LN documentation, the cash conversion cycle formula is days inventory outstanding plus days sales outstanding minus days payable outstanding. In Business Central, each part is a balance divided by cost of goods sold or revenue, times the days in the period. With 50 days of inventory, 25 days of receivables and 30 days of payables, the cash conversion cycle is 45 days. ### Is it better to have a higher or lower cash conversion cycle? A lower cash conversion cycle means cash comes back from inventory and receivables sooner, net of supplier terms, so less cash is tied up in working capital. A higher one means cash is tied up longer. This is general information, not financial advice. ### What if CCC is negative? A negative cash conversion cycle means days payable outstanding is larger than days inventory outstanding plus days sales outstanding. On average, customers pay the business before it pays its suppliers for the goods. ### How do you lower the cash conversion cycle? From the formula, the cash conversion cycle falls when inventory sells faster, customers pay sooner, or the business pays suppliers later. Cutting days sales outstanding from 25 to 20 days takes 5 days off the cycle.