Why the delivery cycle matters
A sale isn’t complete until your customer receives the product or service and you can collect payment. Unnecessary delays between taking an order and delivering slow the cash-conversion cycle, because cash from the sale can’t be collected until delivery. Reviewing and streamlining your delivery processes accelerates cash inflows.
Analyse your current delivery process
- Order processing time: How long do orders sit in your system before they’re scheduled for fulfilment?
- Production or service completion time: Are there bottlenecks or hand-offs that slow down completion?
- Shipping or service delivery time: Are there delays in shipping or scheduling services?
Gather data on these steps to identify where orders languish.
Strategies to shorten the cycle
- Automate order processing. Replace manual order entry or approval steps with automated workflows so orders flow directly from sales to fulfilment.
- Synchronise departments. Ensure sales, production and logistics teams share order information in real time, reducing miscommunication and delays.
- Optimise logistics. Use route-optimisation tools and reliable carriers; for service businesses, schedule appointments efficiently to minimise travel and downtime.
- Reduce batch sizes. Ship orders individually rather than waiting to consolidate them. Smaller, more frequent shipments may get products to customers sooner and start the payment clock earlier.
- Set delivery expectations. Communicate clear delivery timelines to customers. Meeting or exceeding promised delivery dates reduces disputes and encourages prompt payment.
Deliver faster, get paid sooner
Shortening the delivery cycle not only improves customer satisfaction but also reduces the time between making a sale and receiving cash. Combine these improvements with the next step – optimising your billing and payment processes – to maximise your cash flow.