What Is a Sales Cycle?

The operating cycle (oper-ating cycle) refers to the time it takes to complete the process from paying cash to purchase products or services to selling those products or services to recover cash. Among them, "operation" refers to the production and operation activities of an enterprise, and "cycle" refers to such a cash cycle process from the cash outflow of the enterprise to the cash inflow. The length of an enterprise's operating cycle depends mainly on its operating activities. For enterprises in the service industry, the operating cycle refers to the time required from (1) the payment of capital for the service provider T to (2) the receipt of service fees from the customer receiving the service. For companies in the sales industry, the operating cycle refers to the time required from (1) purchasing goods from a supplier to (2) selling the goods to customers and recovering the payment. ^[1]

Operating cycle

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The operating cycle (oper-ating cycle) refers to the time it takes to complete the process from paying cash to purchase products or services to selling those products or services to recover cash. Among them, "operation" refers to the production and operation activities of an enterprise, and "cycle" refers to such a cash cycle process from the cash outflow of the enterprise to the cash inflow. The length of an enterprise's operating cycle depends mainly on its operating activities. For enterprises in the service industry, the operating cycle refers to the time required from (1) the payment of capital for the service provider T to (2) the receipt of the service fee from the customer receiving the service. For companies in the sales industry, the operating cycle refers to the time required from (1) purchasing goods from a supplier to (2) selling the goods to customers and recovering the payment. ^[1]

For a company, the basic concept of the business cycle is: The company uses cash to buy products or services, then sells it to customers to get cash, and then repeats this process. This is called the business cycle.

The production and operation cycle of an enterprise refers to the period from when the inventory is acquired to when the inventory is sold and cash is recovered.