Treasury Priorities for Multinational Corporations - Middle East and Africa

18 | Treasury Priorities for Multinational Corporations Receivable terms The landscape of receivable terms reveals a dual strategy within the market: while a 31–60-day payment cycle is the most common practice, a notable segment actively pursues shorter collection periods, reflecting a proactive stance on cash conversion and a lower tolerance for credit risk. Conversely some companies extend credit for longer durations, indicating a willingness to adapt to industry norms or competitive pressures by offering more flexible payment options. To address this, Citi offers a comprehensive toolkit of digitally-enabled options for both sellers and buyers. Receivables Financing solutions are initiated by a company (the seller) to accelerate cash flow from its outstanding invoices by allowing the seller to sell its approved invoices to Citi for immediate cash. Buyer-Led Solutions are established by the buyer to strengthen their supply chain and optimize working capital. Supply Chain Finance (SCF)/Reverse Factoring is a bank-funded solution that leverages the buyer ’s strong credit rating to benefit their suppliers where the buyer approves supplier invoices for payment . The supplier can then choose to receive early payment from Citi at a favorable interest rate based on the buyer ’s creditworthiness. Dynamic Discounting is a buyer-funded solution that uses the buyer ’s own balance sheet to pay suppliers early. The buyer uses their surplus cash to offer suppliers early payment in exchange for a discount . The supplier has the flexibility to accept the offer on an invoice-by-invoice basis. This toolkit provides a powerful and flexible approach for companies to manage working capital across their entire trade ecosystem. Average Receivable terms 31-60 days Less than 30 days 61-90 days 91-120 days Payment at sight Prepayments More than 120 days 43% 3% 3% 4% 7% 20% 20% Only one third of respondents use cash and cheque, showcasing the exponential adoption of digital means of payment, a shift accelerated post Covid.