For the CFO & VP Finance

The CFO's Guide to Trapped Working Capital

Last updated July 2026

The short answer

To free working capital tied up in inventory, raise inventory turns and cut days sales of inventory (DSI) by removing excess and obsolete stock and right-sizing safety stock — without dropping fill rate. Maintained targets the exact SKUs holding cash hostage and protects service levels while it does.

What you're measured on

Speak in cash conversion cycle, ROIC, carrying cost as a percent of value, and write-down reserve.

  • Cash conversion cycle
  • Days sales of inventory
  • Working-capital-to-sales
  • Write-down reserve
  • ROIC

Where the value is

  • Raise inventory turns / cut DSI on the SKUs holding the most cash
  • Remove excess and obsolete stock that never sells
  • Right-size safety stock without dropping fill rate
  • Give finance one trustworthy view of inventory value and risk

The pains this removes

  • Cash trapped in inventory — often the largest current asset
  • Recurring obsolescence write-offs hitting earnings
  • Carrying cost of 20–30% of inventory value per year
  • No clear view of idle-asset value on the balance sheet

The numbers behind it

20–30% / year
Inventory carrying cost typically runs 20–30% of inventory value per year (often 25–40% for wholesale distributors).
Institute for Supply Management (via NetSuite)
20–30%
AI-driven optimization can cut inventory 20–30% while holding service levels, and reduce forecasting error up to 50%.
Epicor / MDM
~25% / year
Excess and obsolete inventory costs the typical distributor about 25% of its value every year in storage, shrinkage, and cost of capital.
Industrial Supply Magazine

Frequently asked questions

How should a CFO approach free up working capital tied in inventory?

Speak in cash conversion cycle, ROIC, carrying cost as a percent of value, and write-down reserve. To free working capital tied up in inventory, raise inventory turns and cut days sales of inventory (DSI) by removing excess and obsolete stock and right-sizing safety stock — without dropping fill rate. Maintained targets the exact SKUs holding cash hostage and protects service levels while it does.

What outcome should a CFO expect?

Release the cash frozen in stock without hurting service. Raise inventory turns / cut DSI on the SKUs holding the most cash

See what your inventory is really costing you.

Tell us where the cash is trapped — excess stock, idle surplus, slow RFQs — and we'll show you the outcome Maintained can unlock.