The Situation
The business was collecting in 42 days and paying in 6. That single mismatch was funding vendors at the cost of customers — a 36-day cash drag that was forcing reliance on factoring and short-term debt to keep operations running.
Worse, the team didn’t see it as a problem. Paying fast was framed as “being a good partner.” In reality it was costing real money and removing every negotiating lever the company had with its supply base.
What CEI did
Installed same-week invoicing — every job invoiced within five business days of completion, no exceptions. Tracked invoice-delay days as a finance KPI.
Set a Net 15 floor on all vendor terms and moved AP from a rolling, ad-hoc process to a weekly batched run reviewed and prioritized by finance.
Reframed early payment as a strategic lever: only used when capturing a 2%+ discount or solving a specific relationship issue — never as default behavior.
Killed automatic payment authorizations on non-strategic vendors and reset the company’s posture from “pay when received” to “pay when due.”
26 Days
Cash Conversion Cycle Reduction
42 -> 14
AR Days (Target)
6 -> 30
AP Days (Target)
The cycle compressed from 36 days of negative carry to roughly 10–15 days, freeing recurring monthly cash. Vendor relationships didn’t suffer — they improved, because the conversations stopped being about timing and started being about terms.
In Their Words
“We were proud of paying fast. CEI showed us we were being proud of giving away leverage. That single change paid for the engagement in the first quarter.”
— Owner | Confidential Client