This article is written by ETR Digital
For many businesses, a significant proportion of their working capital is tied up in inefficient or outdated trade processes. And in today’s world, the need to be agile and resilient in pursuit of improved financial performance is essential. The Cash Conversion Cycle Calculator (Calculator) helps businesses identify trapped liquidity and release it by leveraging the financial benefits of digital trade instruments.
The Calculator is simple to use, taking just minutes to help corporate treasurers, accountants and finance professionals measure how quickly their business converts its investments in inventory and other resource inputs into cash flow from sales. Highlighting any bottlenecks, it helps them unlock ‘trapped’ cash tied up in inefficient, paper-based or outdated trade processes such as delays in invoicing, payments, and settlement times.
By digitalising transactions, in line with the Electronic Trade Documents Act 2023 (ETDA), businesses can significantly reduce these delays, free up significant amounts of working capital, drive operational efficiency, and increase their profitability.
The Rt Hon. the Lord Thomas of Cwmgiedd notes: “The ETDA provides the legal foundation for trade digitalisation and the benefits that flow from it. However, the realisation of those benefits can only come when traders actually use digital systems. This tool [the Calculator] is a simple, speedy and helpful aid that will enable traders to make an initial assessment of the benefits that can be realised. I am sure that those who use it will quickly see the benefits and thus contribute to the achievement of the objectives of the Act.”
Chris Southworth, Secretary General, ICC UK adds: “One of the most effective, but often overlooked, digital solutions in the treasury and finance toolbox are negotiable instruments. Traditionally, these instruments (e.g. bills of exchange and promissory notes) have been paper-based, but reborn in digital form thanks to the ETDA, they represent a major shift in how businesses transact and manage their financial assets.”
Digital negotiable Instruments (DNIs), which are securely recorded on electronic platforms, enable faster, more transparent, and cost-effective transactions. By shortening the cash conversion cycle using digital bills of exchange and digital promissory notes, businesses can accelerate cash inflows and streamline their payment processes, thereby optimising working capital and improving liquidity.
This digital approach not only improves the speed of trade and supports ESG goals by eliminating paper, it also reduces the risk of fraud, ensuring that all parties involved in a transaction have secure access to the same information.
The Calculator helps a business to assess just how much of its working capital could be unlocked. If the figures indicate that improvements could be made, making contact could be the first step towards improved liquidity and financial performance.
Patrick Kunz, Founder of the Interim Treasury Network, Pecunia Treasury & Finance, comments: “Working capital is a big driver of cash for a company. As a treasurer it therefore has my focus. Though I am not in the lead for reducing DSO and/or total CCC, these are interesting metrics to know and calculate. The online tool provided by the IC4DTi and ETR Digital lets me easily calculate these WC metrics.
“As an extra, I can also calculate the cash effect of reducing my CCC (i.e. increasing my DPO, reducing DSO). This shows me how it is worth investing into reducing the CCC and the monetary savings it can lead to. All this is then put into a PDF report, which is directly shareable with the CFO. It is an amazing starting point to get a grip on working capital KPIs and the cash effect they can have by improving your CCC (and reducing your working capital).”
Our partners at ETR Digital, who developed the Calculator, will kindly donate £5 to our charity of the year – Cancer Research UK – for every business that completes a Calculation cycle and contacts us using a verifiable business email address.
The Calculator can be found here. https://ic4dti.org/getting-started-ccc/
Editor’s Note
The International Centre for Digital Trade and Innovation (iC4DTI) is an independent, not-for-profit Community Interest Company established to drive the digital transformation of trade on a global scale. It is a partnership which includes five government departments with industry and academia and acts as a global benchmark on how to accelerate the implementation of trade digitalisation in support of the ICC Digital Standards Initiative at the international level.
Launched in December 2024, iC4DTI builds on the success of the Centre for Digital Trade and Innovation (C4DTI), which was co-founded in 2022 by ICC United Kingdom, HM Revenue and Customs, Tees Valley Combined Authority and Teesside University. Originally established as a UK-based public–private partnership, the Centre evolved into an international body in response to growing global demand, particularly from emerging economies for guidance, expertise and practical support in modernising trade.
ICC United Kingdom is the representative office of the International Chamber of Commerce (ICC) in the UK. ICC is the largest world business organisation, representing 45 million companies, employing over 1 billion people in 170 countries with ICC rules underpinning $17 trillion of world trade.
ETR Digital specialises in improving cash conversion cycles for corporations and financial institutions by utilising newly legislated digital negotiable instruments. Their solutions help companies enhance liquidity, reduce operating costs, and improve EBITDA by optimising working capital.
ETR Digital also supports clients in improving their credit ratings and complying with IFRS and ESG standards, while offering automation to increase process efficiency by up to 80%. Their technology delivers tangible results with no implementation costs and scalable solutions for global operations.
Reporters should contact:
ICC United Kingdom – Tom Lane, Thomas Lane tom@thomaslanecomms.com
ETR Digital – Dominic Broom CEO, dominic.broom@etr.digital
Also Read
- Investec Capital Solutions and ETR Digital Partner to Bridge UK Trade Finance Gap for SMEs
- The Secret Treasurer writes… How we unlocked liquidity through digital tools (and why you should too)
- Operationalising AI in Treasury: From Experiment to Execution
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