The Setup
A DTC home goods brand based in the Southeast, $7M in annual revenue, 22 employees. They sold through their own Shopify storefront (60% of revenue) and wholesale accounts with regional retailers (40%). Products were manufactured overseas with 90-day lead times, warehoused domestically, and shipped direct.
The business was growing 35% year-over-year. By every top-line metric, things were working. But the founder kept running into the same problem: cash was always tight. Inventory purchases required large upfront deposits. Wholesale customers paid on Net 45. And Shopify payouts, while faster, still lagged behind COGS commitments by weeks.
The Problem
The company's cash conversion cycle — the time between paying for inventory and collecting revenue from sales — averaged 67 days. That meant every dollar spent on product sat tied up for over two months before it came back as cash.
Three compounding issues made it worse:
- No seasonal cash forecasting: The business had strong Q4 sales (holiday season) but needed to commit to inventory purchases in July and August. Without accurate cash flow projections, the founder guessed at order quantities. Guess wrong in either direction and you either stock out during peak season or sit on dead inventory through Q1.
- Emergency credit line dependency: Three times in the prior 18 months, the company had drawn on their $200K credit line to cover payroll or vendor deposits during cash gaps between inventory outlays and revenue collection. Each draw cost roughly $15K in interest and fees.
- Wholesale receivables were unpredictable: Retail partners paid on different schedules. Some paid Net 30, some Net 45, and two consistently paid Net 60+. The bookkeeper tracked this in a spreadsheet that was updated weekly — which meant cash flow surprises were discovered after the fact.
What CentSight Did
The team connected CentSight to QuickBooks Online and Stripe. CentSight pulled in 24 months of transaction history and built a complete picture of the company's cash cycle: when money went out, when it came back, and where the bottlenecks were.
- Automated cash flow forecasting with seasonal patterns: CentSight identified the company's revenue seasonality from historical data and mapped it against inventory purchase timing. The result was a rolling 90-day cash forecast that showed exactly when cash gaps would occur — 6 weeks before they happened, not 6 days.
- Real-time inventory-to-cash tracking: For every inventory purchase, CentSight tracked the full cycle: deposit paid, goods received, units sold, payment collected. The founder could see, at any moment, how much working capital was locked up in each stage of the pipeline.
- Wholesale receivables aging with alerts: CentSight monitored every wholesale invoice and flagged any account that was trending past terms. Instead of discovering a $35K invoice was 15 days past due during a weekly spreadsheet review, the team got an alert on day 3.
The Results
Over the first 12 months with CentSight:
- Cash conversion cycle dropped from 67 days to 38 days. The reduction came from three levers: faster wholesale collections (earlier follow-up on aging invoices), better inventory timing (ordering closer to need based on forecast data), and renegotiated vendor payment terms using CentSight's cash flow projections as documentation.
- Eliminated 3 emergency credit line draws. The 90-day cash forecast gave the founder enough lead time to time inventory purchases, negotiate extended terms with vendors, or accelerate wholesale collections before a cash gap materialized. Zero emergency draws in 12 months, saving approximately $45K in interest and fees.
- Seasonal cash dips predicted 6 weeks in advance. For the first time, the team could see the July-August cash trough coming in June and plan for it: pre-negotiating vendor terms, accelerating Q2 wholesale collections, and staging Shopify promotions to pull revenue forward.
- $180K in working capital freed up. Reducing the cash cycle by 29 days on a $7M revenue base released approximately $180K in working capital that had previously been trapped in the pipeline. That capital funded a new product line launch that would have otherwise required external financing.
Why It Worked
The founder didn't need more revenue. The e-commerce business was growing fine. What they needed was visibility into when cash moved — not just how much. CentSight turned a reactive cash management approach (wait for the gap, scramble to fill it) into a proactive one (see the gap coming, prevent it). That shift eliminated $45K in unnecessary financing costs and freed up enough capital to fund growth internally.