Working Capital: 15 Simple Strategies for UAE Retail

Working capital is the cash needed for daily operations. In UAE retail, seasonal peaks bring big opportunities but also cash stress. Good working capital management helps avoid stockouts, missed sales, and cash crunches.

Inventory:

1. ABC analysis: Focus on high-value, fast-moving items; reduce slow movers
2. Seasonal forecasting: Plan for Ramadan, Eid, DSF, back-to-school
3. Vendor-managed inventory/consignment: Shift stock risk to suppliers for new categories

Receivables:
4) Early payment discounts: Offer small discounts for early B2B payments
5) E-invoicing: Automate invoicing and reminders with payment links
6) Credit policies: Different terms by customer risk; consider credit insurance

Payables:
7) Negotiate longer terms: Target 45–60 days with key suppliers
8) Dynamic discounting: Take early-pay discounts when you have extra cash
9) Centralize procurement: Consolidate vendors to improve pricing and terms

Seasonality:
10) 13-week cash forecast: Update weekly; stress test scenarios
11) Inventory financing: Short-term funding aligned with sell-through
12) Marketing phasing: Front-load high-ROI campaigns before peaks

Resilience:
13) Liquidity buffer: Keep 2–3 months of fixed costs
14) Credit lines: Secure revolving facilities before you need them
15) Contingency playbooks: Pre-planned actions for slow sales or cost spikes

Tools:

• Inventory: Odoo, Zoho, NetSuite
• Payments: Telr, Amazon Payment Services
• Cash/Treasury: Excel with bank feeds, Kyriba
• Analytics: Power BI, Tableau

UAE specifics:

• VAT 5% timing affects cash
• Free zone vs mainland rules impact logistics and invoicing
• Islamic finance: Murabaha (inventory), Ijara (equipment)

Implementation:

• 0–30 days: Build cash model, tighten collections, negotiate top supplier terms
• 30–90 days: ABC/XYZ, seasonal forecasting, inventory financing
• 90–180 days: Supply chain finance, reserves, BI dashboards

Key metrics:

• Cash conversion cycle (CCC)
• Inventory turns
• Days sales outstanding (DSO)
• Days payable outstanding (DPO)
• Forecast accuracy

Start simple: forecast cash, tighten receivables, negotiate payables, and plan inventory around seasons. Small improvements in each area can release significant cash and fund growth.