Allianz Trade Global cash conversion cycle

The UK maintained a 40-day cash collection cycle in 2025, shorter than Germany (79 days), France (70 days), Spain (55 days), and Italy (48 days). The extension was driven by the Days Payable Outstanding (DPO): suppliers were paid faster (DPO fell -1.4 days to 62 days), which more than offset a small inventory decline (DIO -0.7 days to 44 days) and broadly flat collections (DSO +0.3 days to 58 days). The UK's structural efficiency is anchored by the highest DPO in the region (62 days versus 49 days on average), allowing firms to fund a significant share of their inventory and receivables through supplier credit. Overall, the largest CCC was recorded in transport equipment, pharmaceuticals, machinery equipment and electronics. The CCC is forecast to remain broadly stable at 41 days in 2026 (+1 day).

The UK government has taken decisive action to tackle late payments. The Commercial Payments Bill (Small Business Protections (Late Payments) Bill) was confirmed in the King's Speech on 13 May 2026 and introduced to the House of Lords on 19 May. It grants the Small Business Commissioner new powers of investigation, adjudication and fines reaching tens of millions of pounds for persistent offenders, sets a statutory 60-day maximum term for large companies dealing with smaller suppliers and mandates interest on overdue invoices at 8% above the Bank of England base rate. Contractual flexibility is preserved between large firms and in international trade, with phased entry into force from H2 2026 and full application not expected before 2027.

The global CCC rose by a moderate half a day in 2025, reaching 67 days of turnover – 3 days above the 10-year average and close to the 2023 high of 68 days. This trend shows no sign of easing and is primarily driven by companies building larger inventories to enhance resilience.

“Days Inventory Outstanding (DIO)³ now explains almost 80% of the CCC level. This reflects a fundamental change in corporates’ behaviour: they are moving away from "just-in-time" efficiency toward "just-in-case" resilience. By building larger inventories, companies tie up more capital in stock that is not expected to be converted into cash quickly, in exchange for greater supply-chain security and flexibility against geopolitical uncertainty, supply-chain disruptions, and trade fragmentation. In other words, supply chains are no longer optimized only for cost. They are increasingly designed for security, resilience, and optionality”, explains Maxime Lemerle,  Lead Analyst for insolvency research at Allianz Trade.

According to Allianz Trade, global DIO reached 53 days in 2025, stable compared to 2024 but well above the pre-pandemic average of 48 days. Meanwhile, DSO is not adding extra pressure on corporate cash flow: global payment terms increased slightly to 56.5 days (+0.3 days) last year, remaining stable at this level since 2022 and still 3 days below the pre-pandemic norm.

Allianz Trade forecasts a moderate increase in CCC for 2026. Two factors will limit the rise: first, sectors most affected by the US-Iran conflict have limited room to accommodate a further rise in DIO before financing needs enter distress territory; second, the shock should be partly offset by continued private-sector spending on AI infrastructure and data centres, which supports computers & telecoms and software & IT, keeping a meaningful share of the economy on a compressing or at worst flat trajectory.

“On these assumptions, measures to reassess energy security, strategic inventories and supply-chain resilience, together with the direct fallout of the conflict, should push global DIO up by around +2 days. We estimate that each additional day of DIO translates into +1.16 days of CCC globally. This is quite far from what was witnessed after the 2022 shock, when CCC rose by +5 days”, ends Maxime Lemerle.

^{1 The DSO measures the time taken to collect cash from customers.
2 The CCC measures how long it takes for a unit of cash spent on operations to be converted into cash collected from sales.
3 The DIO measures how long cash is locked in stock.}

About Allianz Trade

We predict trade and credit risk today, so companies can have confidence in tomorrow.

Allianz Trade is the global leader in trade credit insurance and a recognized specialist in the areas of surety, collections, structured trade credit and political risk. Our proprietary intelligence network is based on instant access to data of 289 million corporates. We give companies the confidence to trade by securing their payments. We compensate your company in the event of a bad debt, but more importantly, we help you avoid bad debt in the first place. Whenever we provide trade credit insurance or other finance solutions, our priority is predictive protection. But, when the unexpected arrives, our AA credit rating means we have the resources, backed by Allianz to provide compensation to maintain your business. Headquartered in Paris, Allianz Trade is present in over 40 countries with 5,900 employees. In 2025, our consolidated turnover was € 4 billion and insured global business transactions represented € 1,400 billion in exposure.