Charles Hardaker, Global Head of Lending at international financial services firm Ebury, said: “Working capital problems rarely announce themselves early. They show up when growth is already underway, when order books look healthy but cash feels tight, and when finance teams spend more time managing timing gaps than risk. For internationally active businesses, those gaps widen quickly. Different payment cultures, longer settlement cycles, FX volatility, and fragmented banking infrastructure all pull cash away from where it is needed most.
“Improving working capital is less about finding a single fix and more about tightening several pressure points at once.”
1. Shorten the cash conversion cycle where it actually leaks
Many businesses focus on revenue growth without revisiting how long cash is tied up after a sale. Days sales outstanding often creep upward as companies enter new markets and offer more generous terms to stay competitive. The issue is not the terms themselves but the lack of discipline around collections, local payment methods, and buyer behaviour. Reducing friction in invoicing and settlement, especially by using local rails and currencies, can bring material improvements without changing commercial agreements.
2. Extend payables without damaging supplier relationships
Lengthening days payable outstanding is a blunt tool if done badly. Suppliers notice immediately. The more effective approach is separating supplier cash flow needs from the buyer’s balance sheet. Supplier payment financing allows invoices to be settled promptly while the buyer retains extended terms. The supplier gets certainty. The buyer preserves liquidity. When structured as an unsecured and uncommitted facility, it behaves more like a revolving credit line linked to operational spend rather than a traditional loan.
3. Treat FX as a working capital variable, not just a risk
FX volatility impacts margin, but it also impacts liquidity. Businesses that invoice in one currency and settle in another often hold precautionary balances, tying up cash unnecessarily. Better alignment between receivables, payables, and funding currencies reduces the need for buffers. Forward contracts and multi currency accounts are not just risk tools. They are balance sheet tools.
4. Improve predictability before chasing cheaper capital
Many finance teams focus on headline pricing when evaluating funding options. Predictability often matters more. Uncommitted facilities with transparent pricing can be easier to manage than cheaper capital layered with fees, covenants, or utilisation penalties. Working capital improves when funding behaves consistently across cycles, not when it looks attractive on a term sheet.
5. Match funding structures to trading reality
International trade does not operate on neat monthly cycles. Goods move, documents clear, and payments settle at uneven speeds. Facilities that flex with transaction volume rather than fixed limits tend to support growth more effectively. Revolving structures linked to payables or receivables allow capital to expand and contract in line with activity, reducing idle cash and forced drawdowns.
6. Centralise visibility even if cash stays local
Fragmented accounts and payment systems make working capital look worse than it is. Cash exists but cannot be seen or mobilised quickly. Centralised visibility across currencies and jurisdictions allows surplus cash in one market to offset shortfalls in another, even if regulatory constraints prevent physical pooling. Better information alone often releases trapped liquidity.
Improving working capital is not about financial engineering. It is about reducing friction, aligning incentives across counterparties, and accepting that liquidity behaves differently once a business operates across borders. The companies that manage it well rarely rely on a single lever. They build resilience by adjusting several, quietly and continuously.
