How Companies Unlock $3M in Cash

The 10-Day Impact

Most portfolio companies sit on millions in trapped working capital inside their receivables. While private equity sponsors focus heavily on operational improvements, a small tightening of AR discipline often releases more immediate liquidity, yet it rarely gets treated as a strategic priority.

1. Why PortCos Miss This Opportunity

Aging buckets appear "healthy" while cash still drifts. The problem isn't structural, it's operational:

Multiple entities and systems create inconsistent AR follow-up. When portfolio companies operate across different brands or divisions, AR processes vary wildly. One entity might have tight collections discipline while another lets invoices age 90+ days.

Aging buckets mask the real issue: payer drift. Standard aging reports don't show why customers are paying slower. They just show that they are. This masks the underlying behavioral patterns that cause DSO creep.

AR teams stay reactive rather than proactive. Without real-time visibility and automated workflows, collections teams spend their time chasing down information instead of managing payer behavior.

The result? Silent DSO creep and cash leakage that rarely surfaces in board materials until it's significant.

2. What Better AR Discipline Delivers

A stronger, more consistent AR cadence gives your finance team three immediate wins:

Liquidity in the first 60-90 days. Better collections processes compress the cash conversion cycle without changing payment terms or customer relationships. You're not asking customers to pay faster, you're just eliminating the drift that's been costing you days.

Lower revolver usage and borrowing costs. Every dollar collected faster is a dollar that doesn't need to be borrowed. If you're carrying revolver balances, this directly reduces interest expense, money that drops straight to the bottom line.

Clear, predictable weekly cash visibility. You can forecast cash with confidence when you have real-time visibility into collection activities and payer behavior across all entities. No more surprises in weekly cash meetings.

This is one of the simplest, most controllable improvements your finance team can drive, without adding headcount or changing customer terms.

3. The Math Behind the Unlock

Here's what this looks like for a typical $100M revenue PortCo:

A 10-day DSO lift is a low-friction, high-certainty liquidity lever that frees ~$3M in cash for every $100M in revenue.

This happens without changing pricing, headcount, or customer terms.