How to Set KPIs for Using Invoice Financing Effectively

Because funding is just the beginning—what you do with it matters most.

Let’s cut to it—if you’re using invoice financing, you’re probably trying to solve a very real, very urgent cash flow crunch.
And that’s fair. Late payments, long credit cycles, and unexpected expenses can throw even the best-run businesses off course.

But once that financing is in the account—then what?
How do you know if it’s working? How do you know if it’s worth the cost?

That’s where KPIs come in.

Let’s walk through the real way to measure the impact of invoice financing—without sounding like a finance textbook.

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First Things First: What Are You Really Solving For?

Before you even look at a dashboard, ask yourself:

• Why did we use invoice financing in the first place?
• Was it to smooth out monthly operations?
• Was it to take on a bigger order or new client?
• Was it to avoid borrowing from high-interest traditional lenders?

Knowing the why helps you set the how.
So let’s say your goal was to improve liquidity. Then the KPI shouldn’t just be “cash in the bank”—it should be “average number of days we can cover operating expenses without panic.”

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KPI 1: DSO Compression (a.k.a. How fast are you getting paid?)

Days Sales Outstanding (DSO) is the number of days it takes for you to collect payment after a sale.

With Zelo’s invoice financing, many businesses are shrinking their DSO from 90+ days to under 5. That’s game-changing.

What to track:

• DSO before using invoice financing
• DSO after 30, 60, 90 days of using it

Why it matters:
The faster you get cash in, the more confidently you can invest, hire, buy inventory, or take on bigger clients.

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KPI 2: Revenue Uplift from Facility Use

If you’re pulling funds from Zelo’s facility, where are they going?
And did that spending actually move the needle?

Try tracking:

• Sales booked with vs. without financing
• Number of new clients/projects taken on
• Revenue from categories supported by the financing

Even a 15–20% bump in topline revenue from better liquidity is a strong signal you’re doing something right.

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KPI 3: Working Capital Ratio

It sounds technical, but stay with me.
Your Working Capital Ratio = Current Assets ÷ Current Liabilities

Invoice financing can tip this number in your favor—especially if you're constantly “asset-light” but heavy on bills.

A healthy ratio sits around 1.5–2.0
If you’re below 1.0, it might be time to tap into a facility.
If invoice financing pushes you above 1.5, that’s a clear green flag.

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KPI 4: Return on Facility (ROF)

This one is simple:
Revenue Generated from Financed Invoices ÷ Financing Cost

Let’s say you drew down AED 100,000 from Zelo to fulfill a high-margin order that earned you AED 150,000. The cost of financing was AED 3,000.

That’s a 16x return.
Not bad for 24-hour liquidity.

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KPI 5: Facility Utilization Rate

If you’re approved for AED 1 million but only ever draw AED 150,000—are you underusing it?

What to track:

• Monthly utilization percentage (drawn ÷ available)
• Reasons for underuse (seasonality? confusion? unnecessary discipline?)

Higher utilization during planned growth phases is great.
Chronic underuse? Might mean you don’t fully understand what’s possible—or need more training/support.

(That’s where Zelo’s Customer Success team comes in, by the way.)

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KPI 6: Time to Fund New Projects

How long does it take you to action a new client opportunity?

If you’re winning RFPs or getting new POs, invoice financing should cut the lag time between opportunity and execution.

Time from “new project approved” to “project mobilized” is a hidden KPI that shows just how much freedom your facility gives you.

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Final Thoughts: It’s Not Just About Numbers

Sure—metrics matter. But don’t forget the intangibles:

• Did your team breathe easier this quarter?
• Were you able to say yes to a big client you’d have said no to?
• Did you avoid taking out expensive personal loans?

All of those things count, even if they don’t live in a spreadsheet.

Zelo isn’t just here to fund you.
We’re here to grow with you.

From tracking your DSO to helping you reinvest strategically, our tools, dashboards, and team are built to make sure that every dirham you finance—works harder than it costs.

Got questions about how to set the right KPIs for your business? Talk to us.
We’ll walk you through it. No jargon. No pressure. Just clarity.

Zelo is licensed and regulated by ADGM FSRA. Backed by International Holding Company (ADX: IHC), we’ve facilitated financing transactions worth over AED 500 Million