Glossary of Working Capital & Finance Terms
At GSCF, we believe clarity fuels confidence. This glossary is designed to help the Office of the CFO and financial partners navigate the key terms and concepts that drive working capital performance.
A-D
Accounts Receivable (AR)
The amount owed to a company by its customers for delivered products or services.
Alternative Capital
Funding sourced outside traditional banks.
Cash Conversion Cycle (CCC)
The time it takes for a company to convert investments in inventory into cash flow from sales.
Cash Flow Management
Monitoring and optimizing funds coming in and going out to maintain liquidity.
Connected Capital
An integrated approach to working capital management that brings together alternative capital solutions and bank capital and connects stakeholders, data and systems across the full working capital lifecycle.
Days Payable Outstanding (DPO)
The average number of days a company takes to pay its suppliers.
Days Sales Outstanding (DSO)
The average number of days it takes a company to collect payment after a sale.
Dynamic Discounting
A supplier early payment solution where discounts vary based on the payment date.
E-K
Extended Payment Terms
Agreements that allow buyers to delay payments to suppliers without penalties.
Just-in-Time Financing
A strategy for aligning working capital financing precisely with operational needs.
L-R
Liquidity Management
The process of ensuring a company has enough cash to meet short-term obligations.
Order-to-Cash
The end-to-end process of receiving and fulfilling customer orders and collecting payment.
Procure-to-Pay (P2P)
The full cycle from purchasing goods/services to making payments.
Receivables Finance
A form of financing where a company uses its accounts receivable as collateral.
Reverse Factoring (Supply Chain Finance):
A buyer-led financing solution that enables suppliers to get paid early based on the buyer’s credit rating.
S-Z
Supply Chain Finance (SCF)
A set of technology-driven solutions that optimize cash flow across the supply chain.
Trade Finance
Financial tools and services that facilitate international trade and mitigate payment and supply chain risks.
Trade Receivables
Amounts owed to a business by customers for goods or services sold on credit.
Treasury Management
The administration of a company’s holdings, with the goal of optimizing liquidity, mitigating risk, and managing investments.
Working Capital
The difference between current assets and current liabilities. It is used to measure operational efficiency and short-term financial health.
Working Capital Efficiency
How effectively a company uses its short-term assets and liabilities to support operations and growth.
Working Capital Management
Managing short-term assets and liabilities to maintain liquidity and support daily operations.
Working Capital as a Service (WCaaS)
GSCF’s proprietary solution that brings together world-class service, a comprehensive technology platform and a frictionless Connected Capital ecosystem of alternative capital solutions, financial partners, suppliers and buyers.