Welcome back to Data Under Glass, your weekly strategic intelligence extracted from real battlefield deployments, packaged for leaders who need to win, not just understand.
You obsess over Gross Margin, you track CAC religiously, you boast about LTV:CAC ratios in board decks painted green with healthy unit economics.
But profitability is a lie when cash is constrained.
I've watched Series A founders with strong ARR and solid margins nearly liquidate in three months. Not because they stopped selling, but because they couldn't collect. Their revenue was real. Their working capital wasn't.
Today, you're getting the Working Capital Reality Check. How 180-day payment cycles become hidden liabilities, why enterprise sales are cash flow traps, and the operational tactics you need before your most profitable contract becomes your company's end.
— Anderson Oz'.
From The Operator's Desk
Case In Point: B2B SaaS (Series A, $8.4M ARR) selling compliance software to large banks
Unit Economics: Excellent. 45% gross margin, LTV:CAC ratio of 6:1.
The Crisis: Revenue strong, Cash Conversion Cycle broken. Enterprise clients negotiated 180-day payment terms (standard for major financial institutions). Monthly burn: $1.4M.
P&L Story: $700K/month recognized revenue, healthy margins.
Cash Story: $4.2M in accounts receivable 180+ days overdue. Essentially a zero-interest loan to billion-dollar banks.
The Clock: 90 days of cash left. Technically profitable, nine weeks from missing payroll. The most profitable contracts were causing the collapse.
Intervention:
Rejected new 180-day contracts. For all new and renewing clients: 50% upfront, 25% at 30 days, 25% at 60 days. Shifted financing burden back to clients.
Implemented selective invoice factoring for existing customers refusing shorter terms. Sold invoices at 8-12% discount for immediate cash.
Outcome:
Immediate liquidity from factored invoices and 50% upfront payments stabilized burn. Company survived.
The lesson: Accounts receivable is not cash. Cash is the only thing that pays salaries.
The Receivables Trap: Why Enterprise Sales Kills Scale-ups
The problem is the Working Capital Reality Gap. Your investor deck promises exponential growth. Enterprise sales reality delivers a cash flow chokehold.
The 270-Day Cash Conversion Cycle
Your Enterprise Sales Cycle (first touch to signed contract): 90 days.
That's the lie.
The real number is Cash Conversion Cycle (CCC): time it takes for $1 invested in operations to return as $1 collected cash.
CCC = Days Sales Outstanding (DSO) + Days Inventory Outstanding (DIO) - Days Payables Outstanding (DPO)