The cash conversion cycle is the number of days between paying a supplier for stock and getting the money back from customers: days the stock sits, plus days customers take to pay, minus the days the supplier gives you to pay. The longer it is, the more cash a growing store needs.
Days inventory outstanding is how long stock sits before it sells: the average stock at cost divided by the cost of goods sold per day. Days sales outstanding is how long customers take to pay, which for a shop paid by card is the few days until the payout. Days payables outstanding is how long the supplier lets you wait: below zero when you pay on order, because the money leaves before the goods arrive, and thirty when you pay thirty days after delivery.
Worked through on the store the inventory turnover calculator opens with, stock sits about 70 days. With card payouts a few days after each sale and a supplier paid on arrival, the cycle comes to a little over ten weeks: every euro put into stock is away that long before it comes back.
That is the arithmetic behind a familiar complaint, profitable on paper, no cash in the bank. Growth makes it worse, because every reorder is sized for future sales and paid before them, and VAT runs a calendar of its own: the VAT inside this month's sales leaves with the next return, on a date the tax office sets.
The levers are the three terms of the formula: hold less stock for the same sales by ordering smaller batches more often, get paid faster, and pay suppliers later. Supplier terms are usually the cheapest to change: moving from paying on order to paying thirty days after arrival shortens the cycle by the whole lead time plus a month.
The Forecast page in nouz shows the cash side of it on the Stock & cash tab: a cash plan by month, with stock paid on your supplier terms, all on order, 30% on order and 70% on arrival, all on arrival or 30 days after arrival, and the VAT return on its own date. The ecommerce cash flow forecast template lays out the same rows week by week for a spreadsheet.