Working Capital Benchmarks:
Australia & APAC Industrial Distribution

Working capital is one of the most underestimated EBITDA levers in industrial distribution. Most businesses treat it as a finance metric. The ones that release cash treat it as an operating discipline — measured weekly, managed by operations, not finance.

If you want to quantify how your working capital compares to sector benchmarks, use the Working Capital Improvement Calculator.

What Is Working Capital Management?

Working capital is the cash tied up in the operating cycle — primarily debtors (DSO), inventory (DIO), and creditors (DPO). In under-optimised industrial businesses, working capital is typically equivalent to 12–18 months of EBITDA. Use the Working Capital Improvement Calculator to model the cash release opportunity.

Australian Industrial Distribution Benchmarks

Debtor Days (DSO)

Best-in-class: 28–35 days   Average: 42–52 days   Under-managed: 55–70+ days

Moving from 50 to 35 days DSO in a $30M revenue business releases approximately $1.25M in cash.

Inventory Days (DIO)

Best-in-class: 45–60 days   Average: 70–90 days   Under-managed: 100–130+ days

Payable Days (DPO)

Best-in-class: 45–60 days   Average: 30–42 days

Extending DPO from 35 to 50 days in a $30M revenue business with 60% COGS frees approximately $740K in cash.

How to Improve Working Capital

1. Measure DSO, DIO and DPO weekly — not monthly. Weekly visibility creates weekly accountability.
2. Assign ownership to operations — not finance. The people who can change working capital are sales managers and operations managers.
3. Set 90-day targets — specific, measurable targets with named accountability.
4. Renegotiate supplier terms — achievable without damaging relationships in most cases.

Working capital doesn't improve through finance projects. It improves when operations teams are held to it weekly and when the CEO treats a DSO blowout the same way they treat a margin miss.