Cash Conversion
by
Cash cycle tracking for ecommerce teams: measure how long cash is tied up at each stage, then find the stage that is stretching and what it costs.
A profitable ecommerce business can run out of money, and the cash conversion cycle is where that happens. Inventory is paid for months before it sells, payment processors hold funds for days, suppliers move payment terms quietly at renewal. Each of those is a few days and together they decide how much working capital the business needs to operate. Most teams look at the cash balance, which is the output, rather than at the cycle, which is what produces it. This skill measures how long cash is tied at each stage and finds the stage that is stretching.
What It Does
- Measures days at each stage: inventory, receivables and payables.
- Tracks the trend per stage rather than the cycle as one number.
- Finds the stage that has stretched and what the drift is costing.
- Reads processor hold times, which change without notice.
- Projects the working capital the current cycle will require.
- Flags where the cycle is stretching, with the cash each day represents.
Use Cases
- Find out why cash is tighter when revenue is up.
- Catch the supplier who quietly shortened payment terms.
- See what each day of inventory holding actually costs.
- Project the working capital next quarter's plan requires.
Example Session
Revenue is up and cash feels tighter. Why?
Your cycle stretched 19 days. Two stages moved and one of them is new.
- Stage | Days now | Days a year ago | Change | Cash effect
- Inventory held | 94 | 81 | +13 | -$284,000
- Receivables | 3 | 3 | None | None
- Payables to suppliers | 38 | 44 | -6 | -$131,000
- Cycle total | 59 | 40 | +19 | -$415,000
Revenue being up is exactly why cash is tighter: growth funds itself out of working capital, and the cycle stretching at the same time compounds it. Thirteen extra days of inventory is mostly the slower-moving SKUs from the last buy. The six days off payables is one supplier who moved from 60 to 45 at renewal, which nobody flagged because it was in the contract.
Why This Beats Prompting It Yourself
A Cash Balance vs The Cycle That Produces It: The Hidden Risk
A generic prompt reads the bank balance and comments on the trend, which describes the symptom. The balance falling while revenue rises is not a contradiction, it is what growth does when the cycle is stretching, and you cannot act on it without knowing which stage moved and by how many days.
When You Still Need The Term Change Nobody Flagged
A supplier moving from 60 day to 45 day terms at renewal is a contractual detail that passes through procurement without reaching finance. It is worth $131,000 of working capital and appears nowhere as an event. Reading payables days as a trend is what surfaces it, usually months after the fact.
Known Limitations
Inventory days depend on accurate stock valuation, which drifts where landed costs are stale. Payables days reflect when you actually paid rather than the terms on paper, which is usually the more useful number and occasionally a surprise. It measures and flags; changing terms or inventory levels is work elsewhere.
Install It
- Download the ZIP.
It is free and there is no account to create. - Unzip it into your agent's skills folder.
Claude Code reads ~/.claude/skills/, which is hidden by default: the command in the folder block opens it. Other agents scan their own directory, so drop the same folder there instead. - Ask your agent to use it.
Restart the agent if it was already running, then it picks the skill up with no config.
skills folder
Copy
~/.claude/skills/cash-conversion/
SKILL.md
references/cycle-stages.md
tracking/
# one file per period, with days per stage
# macOS: create the folder and open it in Finder
mkdir -p ~/.claude/skills && open ~/.claude/skills
# Windows: paste in the Explorer address bar
%USERPROFILE%\.claude\skills\Frequently asked questions
How is this different from watching the cash balance?
The balance is the result. The cycle is the mechanism, and it is where the answer lives when cash tightens while revenue grows. Breaking it into stages tells you which one moved, which the balance never can.
Which agents does the skill run in?
Any agent that supports the open SKILL.md format: Claude Code, Cursor, Codex CLI, GitHub Copilot, Gemini CLI, Manus, Grok and others load it unmodified. The format is portable, the location is not. Each agent scans its own skills directory, so you drop the same folder into whichever one yours uses. There is no config file to edit and no API key to provision.
What does it need connected to work?
Inventory valuation and movements, orders and settlement timing, purchase orders with payment dates, and bank data. Processor hold times come from settlement records rather than from documentation, which is more reliable.
Why does growth make cash tighter?
Because each additional order is paid for, in inventory, well before it is sold. A growing business funds that gap continuously, which is why a profitable company can run short of cash and why the cycle length matters as much as the margin.
How much is a day worth?
It depends on your daily cost of goods, which the skill computes for you. At the volumes in that example each day of cycle is roughly $22,000 of working capital, which is what makes a nineteen day stretch a real number rather than an accounting curiosity.
What is included with the skill?
The skill itself, the cycle stage reference, the tracking format, and the working capital model. It is free and security scanned. We re-publish the ZIP when the model changes, so download it again if your readings start shifting.
The cash cycle stretches in places no single tool sees.
Polar joins purchasing, inventory, sales and returns in one semantic layer, so you can point at the stage that is lengthening.
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