Asia’s cash cycle hits world-high 70 days amidst slower customer payments

Regional measure increased by 1.2 days in 2025 as receipts delayed outgoing payments.

Asia recorded the world’s longest cash conversion cycle in 2025 at 70 days, as companies across the region continued to wait longer to collect customer payments than they took to pay suppliers.

Customers paid Asian companies after an average of 59 days, whilst businesses paid suppliers after 44 days. This gap helped push Asia’s cycle up by 1.2 days during the year, according to Allianz Research's "Cash at risk: Inventories are driving a new cycle of working capital strain" report.

The cash conversion cycle measures how long it takes a company to turn money spent on operations into cash collected from sales. 
Globally, the cycle rose by 0.5 day to more than 67 days, close to the 2023 peak of 68 days.

The global figure is about three days above its 10-year average and four days longer than the pre-2020 level of 63 days.

The cycle also lengthened by 1.8 days in Western Europe, 1.6 days in the Middle East and Africa, and one day in South America. It shortened by 2.2 days in North America and 1.7 days in Eastern Europe.

Western Europe, North America and South America each recorded cycles of about 63 days. Eastern Europe and the Middle East and Africa had the shortest cycles.

Higher inventories were the main reason for the longer global cycle. Days Inventory Outstanding now accounts for almost 80% of the overall cash conversion cycle and more than 80% of its change between 2014 and 2025. 

Its share of the variation increased from 68% before 2021 to 90% since then.

Companies are holding more stock to protect themselves against geopolitical risks, supply-chain disruption and trade restrictions. 

This marks a move away from keeping inventories as low as possible towards maintaining larger buffers.

The gap between sectors remains wide. A quarter of companies recorded cycles below 43 days, whilst another quarter were above 107 days.

Twelve of the 20 sectors covered recorded longer cycles. Automotive suppliers added four days, whilst paper, metals and textiles each added three days. 

Eight sectors shortened their cycles, including transport equipment by six days, computers and telecommunications by four days, and energy by three days.

Upstream manufacturers and industrial suppliers have generally increased inventories because of supply-chain disruption. 

By contrast, sectors including energy, transport equipment and digital infrastructure have reduced their cycles, supported by stronger pricing, cash generation, industrial policy and demand.

The report expects a limited further rise in 2026. It says disruption linked to the US-Iran conflict is likely to have a modest effect in the first half of the year, with a clearer impact in the second half as supply-chain pressures take time to reach company accounts.

However, it does not expect a repeat of the five-day increase recorded in 2022, when inventories accounted for 81% of the rise.

Electronics, pharmaceuticals, textiles, automotive suppliers, metals and paper are expected to face the greatest pressure because they already hold large inventories and have long cash conversion cycles. 

Construction and machinery and equipment, which have cycles of about 103 days, may also be affected by further stock-building.

Continued private investment in artificial intelligence infrastructure and data centres could offset some of the increase by supporting the computers, telecommunications, software and IT sectors.

The report estimates that global inventory days could rise by about two days in 2026. Each additional inventory day is expected to add about 1.16 days to the global cash conversion cycle.