Global Cash Conversion Cycles Have Stretched
Longer collection times are forcing suppliers to reevaluate their reliance on traditional bank credit.
Updated on Sept. 23, 2026 in Corporate Finance
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The global average cash conversion cycle reached 67 days in 2025 as companies face mounting supply chain pressure. This shift impacts B2B operations worldwide, where businesses increasingly struggle with slower customer collections.
Why it matters
Tightened bank lending has left suppliers carrying more payment risk as companies move from just-in-time inventory to holding larger reserves. These liquidity challenges are now forcing operators to explore alternative financing tools to stabilize cash flow.
The global cash conversion cycle averaged 67 days in 2025, up from the prior period, while Asian firms saw cycles hit 70 days. Additionally, 52% of Western European B2B transactions now operate on credit terms.
The players
Tradewind Finance
A global trade finance provider founded in 2000 that operates 14 offices across 12 countries.
Allianz
A global financial services firm that provides economic forecasting and trade credit analysis.
The details
Companies are managing liquidity by shifting away from just-in-time inventory strategies toward larger buffer stocks, which ties up more working capital. Non-recourse export factoring facilities are being utilized to mitigate this, as these arrangements shift credit risk from the seller to the buyer's profile. These models rely on local market verification to bridge the gap left by restricted bank financing.
Timeline
Tradewind Finance was founded in 2000.
The global cash conversion cycle increased throughout 2025.
Industry reports on payment terms were published in July 2026.
Tradewind Finance hosted its trade route webinar on September 9, 2026.
The Asian cash conversion cycle is forecasted to reach 72 days in 2026.
Market Landscape
This trend marks a decisive shift away from the hyper-efficient just-in-time manufacturing models that defined the previous decade. Companies are now prioritizing supply chain resilience over speed, resulting in the structural lengthening of cash conversion cycles seen globally.
Operators should review their average days sales outstanding to identify if current credit terms are masking underlying liquidity risks. Ensure that your firm has secured diversified financing sources before your sector follows the 72-day cycle trajectory projected for 2026.
The takeaway
The lengthening of payment cycles is a systemic challenge that requires moving beyond reliance on traditional bank credit. Track your company's days sales outstanding against regional benchmarks to determine if you need to integrate non-recourse factoring to protect your cash reserves.
Further reading
For more on managing corporate liquidity and trade risks, visit Corporate Finance.
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Do you trust that current global supply chain shifts will eventually stabilize costs for your household?
