Map a Commercial Working Capital Cycle

A commercial customer tells you cash feels tight even though sales are climbing, and the easy response is to reach for a credit product before you understand why. Working capital pressure has a shape, a sequence of purchase, payment, shipment, invoice, and collection dates that either line up or don't. Your job in this conversation is to map that sequence with the customer before anyone mentions financing. Skip that step and you end up recommending a product that treats a symptom instead of the actual gap between cash going out and cash coming back in.

Why This Conversation Goes Wrong

Most working capital conversations start with a revenue number and a feeling. The customer says sales are up, or that they landed a big order, and then adds that cash is somehow tighter than it should be. A banker who moves straight to a lending conversation is treating a total as if it explains a timing problem, and it doesn't. Revenue growth and cash pressure can rise together for a simple reason. If a company pays suppliers fast and collects from customers slowly, the gap between those two dates widens every time the business grows, even though nothing is going wrong.

The other common failure is treating a single average as the whole picture. A company might report that it collects receivables in sixty days on average, but that number can hide a new customer contract with ninety day terms, a supplier that just tightened its payment window, or a one time delay in invoice approval. If you accept the average and move on, you miss the actual driver of the squeeze, and any product you recommend is a guess dressed up as analysis.

How to Prepare Before You Ask

Before you sit down with the customer, pull whatever you already have on file. Look at prior statements, any existing aging reports, and notes from past reviews so you're not asking the customer to repeat information you should already know. Then build your questions around five points in the operating cycle, purchase, payment to suppliers, shipment, invoicing, and collection from customers. You want dates and terms at each point, not a summary.

Decide in advance what you will ask the customer to send you. A current aging report, an inventory schedule, and a monthly cash forecast give you enough to build a real timeline instead of relying on impressions. Also decide what you will not do in this meeting. You will not promise a product, a price, or an approval, because none of that is yours to offer until the numbers are in front of the right reviewers. Going in with that boundary set keeps you from filling an awkward silence with a commitment you can't back up. If you handle other regulated commercial conversations, the same discipline applies. The article on how to Set Expectations for a Mortgage Appraisal covers the same idea, separating what you can confirm from what still needs review.

What to Say

Start by asking the customer to walk you through the cycle rather than jump to a request. A CFO might say something like this. "Sales are up eighteen percent this quarter, but our cash position keeps shrinking. I don't understand it."

You respond by anchoring the conversation in timing rather than totals. "Walk me through the sequence. When do you pay your suppliers, how long does inventory sit before it ships, and when do your customers actually pay you once you invoice them."

The CFO answers with specifics. "We pay vendors within fifteen days. Inventory sits about forty days before it moves. Our contractors pay us sixty days after delivery."

Now you can name the gap without prescribing a fix. "That's roughly a hundred day span between when you pay your suppliers and when you collect from your customers, and that gap grows every time you take on a bigger order. It's probably a bigger driver of your cash pressure than the sales growth itself. Send me your current aging report, your inventory schedule, and a monthly cash forecast, and I'll get the right team looking at this properly." Notice what that last line does not include. No mention of a specific product, no timeline for approval, no promise of what the bank will offer. You're documenting a pattern, not closing a deal.

Mistakes to Avoid

Don't let the customer's framing set the agenda before you've mapped the cycle. If a CFO opens with "we need a line of credit," resist the pull to start talking product. Ask about timing first, because the data might point to a different solution or no solution at all, just a change in invoice approval or a renegotiated supplier term.

Don't blame growth for the squeeze without checking the actual dates. Growth is often the trigger that exposes a gap that already existed, not the cause of the gap itself. Don't treat an annual average as though it reflects steady conditions all year. Ask directly whether anything changed recently, a new supplier, a new customer contract, a one time large order, because those events explain sudden pressure far better than a rolling average does.

Don't promise availability, pricing, or approval in this meeting. That promise isn't yours to make until someone has reviewed the actual documents, and making it anyway sets an expectation you might not be able to meet. Don't leave the meeting without separating what's confirmed from what's a forecast supplied by the customer. A forecast is useful, but it's not the same as a number pulled from an aging report, and mixing the two makes your notes less reliable for whoever reviews the file next.

How to Practice and Score This Conversation

This conversation is hard to get right the first time because it asks you to slow down exactly when the customer wants a fast answer. A manager coaching a banker on this should watch for a few concrete things. Did the banker ask about all five points in the cycle, purchase, payment, shipment, invoice, and collection, rather than settling for a revenue summary. Did the banker ask what changed recently instead of accepting an average as the full story. Did the banker avoid naming a product or promising an outcome before the documents were in hand. Did the banker end the meeting with a clear list of what to send and who owns each piece of data.

Rehearsing this out loud helps more than reading about it. You can practice with a colleague playing the CFO role, or run the scenario against an AI counterpart on DealSpeak, which scores you on exactly these points, whether you asked for timing before totals, whether you avoided premature promises, and whether you closed with a documented next step instead of a vague reassurance. For a broader set of scenarios built around commercial and consumer banking conversations, the Banking practice conversations hub has related exercises worth working through. If you want to keep building this kind of discipline into adjacent conversations, the piece on how to Guide a Mortgage Closing Disclosure Review applies the same habit of separating confirmed facts from open items.

Mapping a working capital cycle turns a vague complaint about cash pressure into a documented sequence that the customer and the bank can actually discuss. It takes more patience than offering a quick product suggestion, but it produces a file that holds up when someone else reviews it. Practice the questions until asking about timing before totals becomes automatic.