UK companies have faster cash collection cycles than the global average

Latest data from Allianz Trade showed that the Cash Collection Cycle (CCC) rose again in 2025 (67 days) and appears to have settled at a structurally high plateau, with the driver being inventories, with companies moving away from ‘just-in-time’ efficiency toward ‘just-in-case’ resilience.

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 (Days Sales Outstanding (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. It now stands at 67 days of turnover, some +3 days above its 10-year average and close to its 2023 high (68 days). This trend shows no sign of easing and is primarily driven by companies’ efforts to enhance resilience through larger inventories.

Maxime Lemerle, Lead Analyst for insolvency research at Allianz Trade said “Days Inventory Outstanding (DIO) 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 optimised only for cost. They are increasingly designed for security, resilience, and optionality.”

According to Allianz Trade, global DIO reached 53 days in 2025, quite stable compared to 2024, but well above the pre-pandemic average (48 days). In this context, DSO is not adding extra pressure on corporates’ 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 compared to the pre-pandemic norm.

Allianz Trade expects a contained rise in CCC in 2026. First, the 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.

Lemerle concluded, “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.”