Companies in Asia-Pacific are facing rising cashflow pressures as global working capital requirements (WCR) increase, with the region seeing record-high levels of delayed payments and longer turnover cycles in 2024.
According to Allianz Trade’s latest WCR and Days Sales Outstanding (DSO) report, global WCR rose by two days to 78, the highest since 2008. APAC’s WCR reached 82 days – up by two days from 2023 and surpassing all previous records for the region. At the same time, the region’s DSO rose to 66 days, exceeding the global average of 62 days.
One in four companies in Asia-Pacific received payments more than 90 days after invoicing, the highest rate globally alongside the Middle East. The global average was 21%.
China and Singapore were among the main contributors to the region’s increase in WCR, with respective gains of four and two days. Sector-level data also revealed broad-based increases.
Transport equipment WCR rose by 22 days in the region, while commodities and pharmaceuticals saw increases of eight and six days, respectively. Electronics, pharmaceuticals, and B2B services also posted higher DSOs.
The increase in working capital needs was largely driven by longer payment terms, while other components – inventory and supplier payment periods – remained relatively stable.
In Asia, this trend revives an upward trajectory observed in 2021 and 2022, when companies faced similar pressure to maintain liquidity.
Globally, 35% of companies had WCR exceeding 90 days by the end of 2024. European firms, in particular, saw a sharper four-day increase in WCR, driven by higher inventory levels and shorter supplier payment terms. This resulted in an estimated €11 billion in additional trade credit extended to business partners in early 2025.
In contrast, US companies reduced inventories, freeing up capital and allocating more funds to shareholder returns. With US$234 billion in buybacks announced in the first quarter of 2025 alone, annual repurchases are expected to surpass US$1 trillion.
Trade tensions could add more pressure. Allianz Trade estimates that if proposed US tariffs are fully enforced, companies in Asia supplying both American and European markets would be indirectly affected. European firms may need an additional €8.5 billion in financing, while US firms would require US$15.5 billion, equivalent to three days of turnover in each market.
With Asia-Pacific already exposed to extended payment cycles, how should businesses prepare for more uncertainty in trade flows and financing terms? Join the discussion below.
