When I wrote about working capital management in The Financial in 2024, liquidity was already slipping out of boardroom focus. Credit was available, borrowing costs were manageable, and growth conversations dominated decision-making.
My position, then as now, was uncomplicated: cash matters most when it is least fashionable to talk about it.
That belief did not come from theory. It came from operating experience across technology and healthcare businesses in the Middle East, in environments where revenue growth often outpaces cash conversion and long credit cycles are quietly normalised.
The last two years have not changed the relevance of cash. They have simply exposed what happens when liquidity discipline is diluted.
What the Regional Data Is Telling Us
Across the GCC, working capital stress is not a new problem. It is a structural one that becomes visible only when conditions tighten.
• UAE
Mid-market companies typically operate with DSOs between 90 and 150 days, while government and semi government exposures frequently extend beyond 180 days. In infrastructure, healthcare, and IT services, DSOs crossing 200 days are not uncommon.
• Saudi Arabia (KSA)
Large government-linked projects often run on DSOs of 120 to 180 days, with smaller vendors absorbing the financing burden. Despite Vision 2030-driven growth, cash conversion remains uneven across the supply chain.
• Wider GCC
Regional working capital cycles are structurally longer than global averages. While mature markets target DSOs of 45–60 days, many GCC businesses operate at two to three times that level, relying on bank facilities to bridge the gap.
For years, low borrowing costs masked this inefficiency. Today, higher interest rates have turned slow collections into a measurable erosion of margins and resilience.
Collections Are Not an Admin Problem. They Are a Leadership Choice.
One of the most difficult challenges I faced in a prior leadership role involved a large government client where DSO had crossed 400 days. This was not an exception. It had become accepted as part of the operating model.
Reducing that exposure to around 220 days over time was not a technical victory. It was a statement of intent.
The improvement came from:
• Tightening invoice accuracy and submission discipline
• Making collections a cross-functional responsibility, not a finance-only task
• Escalating consistently, without damaging long-term relationships
• Accepting uncomfortable conversations as part of financial stewardship
A DSO of 220 days is still inefficient. But moving the needle signalled that cash mattered, and that leadership was willing to prioritise it.
Cash Positivity Is Not the Absence of Growth. It Is the Quality of Growth.
In the technology business I oversaw, the focus was explicit: cash-positive operations were non-negotiable. Working closely with business leadership, decisions were filtered through a simple test: Does this improve or dilute cash?
This discipline enabled internal funding of growth, reduced reliance on short-term borrowing, and strengthened negotiating leverage with suppliers and lenders. Revenue growth followed, but it did so under cash discipline, not the other way around.
Knowing When to Say No Is Also a Financial Strategy
Healthcare, by design, operates on extended credit cycles. That reality does not make every deal acceptable.
There were situations where commercially attractive opportunities came with expectations of even longer credit terms. In some cases, the correct decision was to walk away.
Not because the revenue was unattractive, but because the cash risk was disproportionate. Saying no to revenue is difficult. Saying no to cash-destructive revenue is leadership.
Why Cash Dictates Terms When Cycles Turn
The recent liquidity reset has reinforced a simple truth: cash determines who controls outcomes when conditions tighten.
Organisations with liquidity discipline:
• Negotiate rather than accept terms
• Absorb shocks without panic
• Invest when others retreat
• Preserve credibility with banks, suppliers, and regulators
Those without it are forced into reactive decisions, often at the worst possible moment.
Cash is not idle capital. It is strategic optionality.
Connecting Back to 2024: The Lesson Came Faster Than Expected
Looking back, the 2024 discussion on working capital was not predictive. It was preventive.
Liquidity discipline was never about pessimism. It was about respecting cycles and understanding that financial resilience is built before it is tested.
The organisations that will emerge strongest from this period will not be the most aggressive ones. They will be the ones who protected cash when it was inconvenient to do so.
Cash was always king.
We simply forgot to treat it like one.