# What is cash conversion cycle?

Source: https://launch-rec.com/glossary/cash-conversion-cycle. Category: Funding. Market: US and UK.

## Definition

The total time between paying a contractor and collecting the matching client payment. In contract staffing it is commonly around 52 days.

## In practice

The cycle is pay frequency plus billing lag plus client payment terms plus collection slippage. Each component is negotiable, and shortening any of them releases cash permanently.

Moving contractors from weekly to fortnightly pay, or invoicing on Monday instead of Friday, can be worth more than a rate increase.

## Related terms

- https://launch-rec.com/glossary/dso
- https://launch-rec.com/glossary/working-capital
- https://launch-rec.com/glossary/payroll-funding