What is a good cash conversion cycle?▾
Lower is better. Retailers and distributors often run 30–60 days; manufacturers 60–120 days. Some online retailers have a negative CCC because customers pay before suppliers are paid.
How do I reduce the cash conversion cycle?▾
Collect faster (shorter credit terms, reminders, early-payment discounts), hold less stock and negotiate longer supplier terms.
Is the MSME 45-day rule relevant?▾
Yes. Buyers must pay registered micro and small enterprises within 45 days under section 43B(h), which limits how far DPO can be stretched with MSME suppliers.
