There's a difference between profitability and liquidity. Profitability means: you've earned more than you've spent – on paper. Liquidity means: you actually have the money in your account. And that's exactly where the problem lies.

82% of small businesses fail due to poor cash flow management, according to a U.S. Bank study. 60% experience cash flow problems annually, according to Intuit. The numbers are brutal: 22% can't pay their bills, 45% don't pay themselves.

This isn't a fringe phenomenon. This is reality for the majority of small and mid-sized businesses.

A SaaS company in Dresden, Germany – founded in 2020, now 35 employees, specializing in HR software for mid-market companies – experienced exactly this. In 2023, they made €2.8 million in revenue. Profitable. On paper. But in March, they had to take out a line of credit to make payroll. Why? Because €400,000 was stuck in outstanding receivables. The work had long been delivered, but invoices went out too slowly, and payment terms were too long. Cash flow? Disaster.

The problem isn't that customers don't want to pay. The problem is: too much time passes between work completion and money arrival. And that time costs you liquidity.

How Leadtime Helps

Leadtime accelerates the entire process from "work done" to "invoice out." Everything your team does – tickets, projects, time tracking, change requests – automatically flows into the Invoice Review. As soon as work is completed, it can be billed. No waiting. No manual month-end collection.

The result: Faster billing → shorter cash conversion cycle → better liquidity.

DSO: The Metric That Determines Your Survival

The most important metric for cash flow is DSO – Days Sales Outstanding. It measures the average number of days between "invoice out" and "money in the bank."

The median across all industries is about 36-40 days, according to APQC data. The average DSO in the U.S. is 38.86 days according to the National Summary of Domestic Trade Receivables (Q1 2023). But there are massive differences: consulting and some industries often sit at 60-90+ days. Retail and e-commerce? Often under 30 days.

As a rule of thumb:

• 30 days or less: Good. You're collecting payments efficiently.

• 30-45 days: Average. There's room for improvement.

• 45+ days: Red flag. Your cash flow is at risk.

The problem: the longer your DSO, the longer your money is tied up. And the longer your money is tied up, the less liquidity you have for operations, growth, or unexpected expenses.

A digital agency in Cologne, Germany – founded in 2018, about 50 employees, specializing in app development for mid-market clients – had a DSO of 62 days in 2022. That means: on average, it took over two months for money to hit the account. In the meantime? They had to pay salaries, pay freelancers, renew software licenses. The company was profitable – but constantly under liquidity pressure. The CFO said in 2023: "We're effectively financing our customers."

After implementing a structured billing process, DSO dropped to 38 days. Result: significantly less stress, no more bottlenecks, and the dependency on external financing disappeared.

How Leadtime Helps

Leadtime shortens your DSO in two steps:

1. Faster invoicing: As soon as work is completed, it automatically lands in the Invoice Review. You click "Generate Invoice" – done. Instead of weeks, it takes minutes.

2. Receivables Management: The invoice automatically lands in open receivables. When the payment deadline is exceeded, it appears in the Overdue list. One click – reminder goes out.

Less delay between "work done" and "invoice out" = shorter DSO = better cash flow.

Why Billing for Digital Services Is So Complex

If you run a digital agency, IT consultancy, or SaaS company, your billing structure is probably more complex than you think. Typical revenue streams:

• Subscriptions: Monthly or annual fees for product access

• Support Services: Time-based billing for tickets and ad-hoc requests

• Projects: Large deliverables with milestones, often fixed-price

• Change Requests: Additional work outside the original scope

• Retainers: Monthly flat fees for ongoing support

Each of these revenue streams has different billing cycles, rates, rules, and customer-specific agreements. Manually pulling this data together every month – across multiple customers – is time-consuming and error-prone.

And here's the catch: every delay or error directly impacts your cash flow.

About half of all B2B invoices in the U.S. are overdue, according to PYMNTS. This isn't because customers don't want to pay – it's often because invoices go out too late, contain errors, or are unclear.

An IT consultancy in Frankfurt – founded in 2019, about 40 consultants, specializing in SAP implementations – took an average of 12 days at month-end in 2023 to gather all the data for invoices: Which tasks were completed? How many hours were logged? What external costs were incurred? Which change requests were approved?

The manual gathering not only cost time – it also led to errors. About one in five invoices contained a mistake: wrong hourly rate, missing item, incorrect project title. Each error meant correction, delay, and more cash flow stress.

How Leadtime Helps

Leadtime connects Operations and Finance directly. Everything your team does – tickets, projects, time tracking, change requests – automatically flows into the Invoice Review.

At month-end, you open the Invoice Review. There you see all billable items that haven't been invoiced yet:

• Logged time on support tickets

• Completed project work packages

• Subscription renewals

• Retainer agreements

• Manual items like external costs

You quickly check them, click "Generate Invoice" – done. No Excel lists. No manual collections. No forgotten items.

From Operations to Cash – No Detours

Fast, accurate billing isn't just administrative hygiene. It's a strategic lever for financial stability and growth.

It improves liquidity without raising prices or cutting costs. It reduces dependency on external financing. It builds customer trust through professional, reliable invoicing. And it gives you back time as a founder or CFO – time you no longer spend chasing payments.

Leadtime integrates billing deeply into your project and service workflows. The result: Less manual work, fewer errors, faster cash inflow, stronger financial foundations.

Because lead time shouldn't stop when the project is done. It should continue – all the way to the bank.