Working Capital Efficiency Framework

How to use this framework: For each question, score 2 if fully in place, 1 if partially in place, and 0 if not in place. Total your score across all 17 questions (maximum 34 points) and use the scoring guide to identify your maturity band. Use the lowest-scoring areas to prioritise where cash is most likely trapped.

Score your working capital management across receivables, payables and inventory. Identify where cash is trapped, benchmark against sector peers and get a prioritised improvement plan.

Area 1: Accounts Receivable

Q1. Debtor days (DSO) calculated monthly and tracked against target

2 — Fully in place: DSO is calculated each month and compared against a defined target — not just reported as a point-in-time figure. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q2. Aged debtor report reviewed weekly by finance

2 — Fully in place: The finance team reviews a full aged debtor analysis every week — not only at month end. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q3. Credit control process in place with clear escalation steps

2 — Fully in place: A documented process exists from the first payment reminder through to legal action — with owners and SLAs at each stage. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q4. Invoice terms clearly stated and enforced consistently

2 — Fully in place: Payment terms appear on every invoice and are applied consistently — not waived informally for certain customers. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q5. Cash on delivery or prepayment applied to new customers without track record

2 — Fully in place: New customers with no payment history are required to pay in advance or on delivery until trust is established. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Area 2: Accounts Payable

Q6. Creditor days (DPO) calculated monthly

2 — Fully in place: Actual payment terms versus contracted terms are understood and tracked — both are monitored separately. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q7. Supplier payment terms actively negotiated

2 — Fully in place: Longer payment terms are sought when commercially feasible — term negotiations are part of supplier onboarding. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q8. Payment runs batched on scheduled dates

2 — Fully in place: Suppliers are paid on defined run dates — not on an ad hoc basis when invoices arrive or suppliers chase. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q9. No early payment discounts forfeited

2 — Fully in place: Where early payment discounts are available, a conscious decision is made whether to take them — they are never missed through inattention. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Area 3: Cash Conversion Cycle

Q10. Cash conversion cycle (DSO + DIO − DPO) calculated quarterly

2 — Fully in place: The full CCC metric is calculated and reviewed at least quarterly — not inferred from individual components. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q11. CCC trend tracked over time

2 — Fully in place: Whether the cycle is shortening or lengthening as the business grows is monitored and understood. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q12. Working capital seasonality understood and modelled

2 — Fully in place: Peaks and troughs in the working capital cycle are reflected in cash flow forecasts — not discovered after the fact. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q13. A working capital target is set in the annual budget

2 — Fully in place: A formal working capital target is included in the annual budget — not treated as a residual or output-only figure. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Area 4: Process & Controls

Q14. Invoice-to-cash process documented with owners and SLAs

2 — Fully in place: Each step in the invoice-to-cash process is documented, has a named owner, and has a defined service level agreement. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q15. Invoice errors and disputes tracked with root causes addressed

2 — Fully in place: Billing inaccuracies are logged, root causes are identified, and systematic errors are corrected at source. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q16. Habitual late payers identified and terms adjusted

2 — Fully in place: Customer payment behaviour is analysed over time — chronic late payers are identified and their terms are adjusted accordingly. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Q17. Working capital KPIs reported to the board monthly

2 — Fully in place: DSO, DPO, and CCC are included in the monthly board pack — not relegated to management accounts only. 1 — Partially in place: partially in place or informally applied 0 — Not in place: not in place

Your Score

0 / 34

Answer questions above to see your result

Next step: Identify the area where your score is lowest. Questions scored 0 are your highest-priority actions. Book a discovery call to discuss your results with a fractional CFO and build a clear remediation plan.

Working Capital Efficiency Framework

Area 1: Accounts Receivable

Area 1: Accounts Receivable

Area 2: Accounts Payable

Area 3: Cash Conversion Cycle

Area 4: Process & Controls

Discuss your results with a fractional CFO.Book a discovery call.

Discuss your results with a fractional CFO.
Book a discovery call.