How targets are set

Cash-cycle targets

Targets for days sales outstanding (DSO), days payable outstanding (DPO), inventory days (DIO) and the cash conversion cycle (CCC) come from SEC EDGAR annual filings of US public companies. We use fiscal year 2025, covering fiscal years that ended between June 30, 2025 and June 28, 2026.

The dataset holds 2,333 companies with revenue of $10M or more. Banks, insurers, real estate and other financial filers are left out. Retailers are left out of the general group because near-cash sales distort their receivable days. Each metric uses the companies that report the inputs it needs. That gives 1,890 companies for DSO, 1,482 for DPO, 1,248 for inventory days and 1,244 for the cash conversion cycle.

Companies are grouped by industry using their SEC industry code and by annual revenue into four bands. The bands are under $50M, $50M to $250M, $250M to $1B, and over $1B.

The target for each group is the median, the middle company in that group. Best in class is the top quartile and is shown for illustration. It does not change the score. For DSO, inventory days and the cash conversion cycle the best quarter is the lowest. For DPO it is the highest.

Medians are shown at the calculated value. A whole-day median stays a whole day. Any other day figure keeps a tenth of a day. Percents show one decimal, or more when the figure needs it. Scoring uses the unrounded number.

Each metric uses year-end balances against full-year revenue or cost of revenue, multiplied by 365. Extreme values in the top and bottom 1% are removed before groups are measured.

The cash conversion cycle target in your results is your DSO target plus inventory days, where inventory applies, minus your DPO target. Best in class for the cycle is the top quartile from the filings, not that same sum.

Smaller companies

Public companies skew large. Some industry and size groups hold fewer than 15 companies. Those groups use the industry-wide figure across all sizes instead. Smaller revenue bands lean on industry-wide figures more often for this reason.

We cross-check the results against the US Census Bureau Quarterly Financial Report. It covers private as well as public companies by industry and asset size, which fits mid-market businesses well. Receivable days for manufacturers line up closely across both sources.

Healthcare Services, Distribution and Construction

These three industries use the same SEC EDGAR method as the others. The target is the peer median. Best in class is the top quartile. A size band with fewer than 15 companies uses the industry-wide median. Treasury targets, including cash runway and liquidity headroom, stay on the practitioner approach already described. They do not change for these industries.

Healthcare Services is the provider side, not life sciences. The peer set is SIC 8000 through 8099, covering offices of doctors, hospitals, labs, home health and outpatient care. 70 companies had revenue of $10M or more. Fiscal years in the set ended between June 30, 2025 and December 31, 2025. DSO uses 60 companies and the industry-wide median is 46.1 days. Bands under $250M use that industry-wide median. The $250M to $1B band uses 15 companies and a median of 46.0 days. The over $1B band uses 33 companies and a median of 43.9 days. DPO uses 18 companies. Every size band is below 15 companies, so every band uses the industry-wide median of 48.6 days.

Healthcare providers carry little inventory. Inventory days were computed for 15 companies and the cash conversion cycle for 17, and every size band fell back to the industry-wide figure. Those two metrics are not shown as targets for Healthcare Services.

Distribution is wholesale durable and nondurable goods, SIC 5000 through 5199. Retail SIC 5200 through 5999 stays out, the same exclusion used for the general group. 79 companies had revenue of $10M or more. Fiscal years in the set ended between June 30, 2025 and May 31, 2026. DSO uses 55 companies and the industry-wide median is 41.4 days. DPO uses 57 companies and the median is 45.0 days. Inventory days use 64 companies and the median is 62.2 days. The cash conversion cycle filing set has 40 companies. Bands under $1B have fewer than 15 companies, so a mid-market distributor sees the industry-wide median for each of these. Only the over $1B band has its own median. The cycle target adds the DSO and inventory medians and subtracts DPO. The filing count on the cycle is 40 companies.

Construction is SIC 1500 through 1799, covering building construction, heavy construction and special trades. 54 companies had revenue of $10M or more. Fiscal years in the set ended between June 30, 2025 and January 31, 2026. DSO uses 24 companies and every size band uses the industry-wide median of 50.5 days. DPO uses 26 companies. Bands under $1B use the industry-wide median of 43.4 days, and the over $1B band uses 15 companies and a median of 40.2 days. Inventory days use 18 companies and every band uses the industry-wide median of 12.6 days. Many contractors report little inventory, while homebuilders in the set keep the median above zero. The cash conversion cycle rests on 10 companies, so every size band uses that industry-wide figure. It is a thin sample and the count is shown next to the target.

The Census Quarterly Financial Report remains a cross-check and not a target source. Wholesale trade is the Census series that lines up with Distribution. Healthcare services and construction are thin or absent in that report, so the filing median stands on its own for those two.

Process targets

Targets for process metrics such as touchless invoice processing, cash application match rates and cost per invoice are Clear Cycle Advisors practitioner targets. They are informed by published research from three sources.

• Ardent Partners, Accounts Payable Metrics that Matter in 2026. Best-in-class AP teams process 55.2% of invoices touchless.
• The Hackett Group, 2025 Digital World Class Matrix for cash application, August 2025. The median auto-match rate in cash application is 70%.
• Institute of Finance and Management (IOFM), Eight Benchmarks for Efficiency and Effectiveness in Shared Services, 2025, and Summer 2026 AP Performance Benchmarks.

Best possible DSO and past-due DSO are practitioner targets too. Public filings do not split current and past-due receivables.

Treasury

Treasury targets are Clear Cycle Advisors practitioner targets. These cover forecast variance, idle cash, number of bank accounts, bank fees, sweeps, FX hedging, covenant headroom, liquidity headroom and cash runway. No credible public benchmark exists for them by industry and company size.

Liquidity headroom and cash runway stay practitioner targets. Public filings rarely report undrawn credit lines and leave out pre-revenue companies, so public filing data would understate real headroom.

The survey figures below give context. They are quoted as published and are not used as targets.

• Association for Financial Professionals (AFP), 2025 AFP Treasury Benchmarking Survey. The median company takes 2 business days to resolve a bank reconciliation discrepancy. Companies under $1B in revenue average 8.2 business days. The median treasury team has 6 full-time staff, and 4.5 at companies under $1B.
• Strategic Treasurer and TIS, 2025 Cash Forecasting and Visibility Survey. 58% of companies get cash position updates at least daily, while 83% want them.
• Kyriba, 2026 CFO Survey. 59% of CFOs lack a complete real-time view of cash and liquidity.

Delinquent AR more than 90 days past due

This metric is the share of total accounts receivable that is more than 90 days past its due date. For healthcare providers it is the share of billed AR more than 90 days from the date of service or discharge, which is how that industry measures it.

Each industry target comes from published aging data, not from a single rule of thumb. For most industries we use two sources.

• Dun & Bradstreet, U.S. Accounts Receivable Industry Report, Q4 2025. The report shows the share of receivable dollars more than 90 days late in more than 200 industry segments.
• Credit Research Foundation, National Summary of Domestic Trade Receivables and definitions. This is a quarterly survey of US credit departments. The median company holds well under 1% of receivables more than 90 days past due.

For hospitals and physician groups we use HFMA MAP Keys and award-winner statistics, together with MGMA guidance.

• HFMA, MAP Keys and 2024 MAP Award winner statistics.
• MGMA, Top KPIs Physician Practices Should be Monitoring, April 2023.
• OCC, Comptroller's Handbook, Asset-Based Lending.

We set each target at or a little better than the typical published level for that industry, so meeting it means collections are performing well rather than just average. Targets differ because collection norms differ. Construction carries retainage and pay-when-paid terms. Healthcare depends on insurer adjudication. Recurring software billing collects faster.

Distribution uses 3%. Construction uses 8%, and the count leaves out retainage that is not yet billable or due. Healthcare Services uses 10% for a physician group or practice management company, aged from the date of service. A hospital uses 20%, aged from discharge.

Banks treat receivables more than 90 days old as ineligible for borrowing-base lending, per the OCC Comptroller's Handbook on Asset-Based Lending. A high figure here also lowers how much a revolver can lend against receivables.

We review these targets each year when new benchmark data is published. Select the i next to a target on the results to see its source.

How to read the targets

Targets are directional. The cash-cycle target is where the middle company in your peer group sits. Best in class shows the top quarter and is not the score you are measured against. They are not audited benchmarks. Your own targets should reflect your terms, customers and business model.

Notes are not scored. They do not change module scores, gaps or dollar lines. Ian reads them before a consult readout. They are not an input to the score.