💡 Why Strong Accounts Receivable Management Is the Lifeline of Your Business

At Merzaai Advisory & Accounting, we often say:
“Revenue is theory. Collections are reality.”

No matter how good your sales are, if customers aren’t paying you on time—or worse, not at all—your business will feel the pinch. You’ll start missing supplier payments, delaying salaries, and losing sleep over cash flow.

We’ve seen this movie before. And we know how to fix it.

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🚨 The Hidden Dangers of Weak Receivables Management

Many businesses in the UAE proudly show high revenues on paper. But if you dig deeper, you find:

• Old receivables that are never followed up
• Clients given 90+ day terms without any vetting
• No system to flag overdue invoices
• Sales teams rewarded for closing deals, not collecting cash

This leads to locked-up cash, inflated profits, and eventually, liquidity stress.

“Revenue is theory. Collections are reality.”

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🔍 Real Case Example

One client came to us with what looked like strong sales and profit margins. But when we reviewed their accounts receivable, over 40% of their invoices were overdue by more than 60 days—many beyond hope of collection.

They had over AED 800,000 in aging receivables but were relying on an overdraft to pay salaries.

Within 3 months of working together:

• We restructured their credit terms
• Put in place a simple follow-up schedule
• Flagged high-risk customers
• Created cash collection incentives for the sales team

📈 Result? Over AED 400,000 recovered and cash flow stabilized.

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🧰 What Good AR and Credit Management Looks Like

1. Set clear credit terms
Decide how long clients can take to pay—and enforce it. Standard in the UAE is 30 days, but many SMEs let this stretch to 60 or 90 without any formal agreement.

2. Screen new customers
Don’t just chase the sale. Understand a new client’s track record before offering credit. Risky clients should pay upfront or in shorter cycles.

3. Automate reminders
A gentle nudge before the due date, followed by firm follow-ups, can cut overdue invoices by half.

4. Align sales & finance
Your sales team should be aware of payment status—and shouldn’t continue selling to chronic late-payers.

5. Track DSO (Days Sales Outstanding)
This key metric shows how long your customers take to pay. The lower, the better. A high DSO is a red flag.

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💼 How Merzaai Can Help

At Merzaai Advisory & Accounting, we don’t just track numbers—we help you collect faster, lend smarter, and stay liquid.

✅ Setup & clean-up of your AR ledger
✅ Credit policy design
✅ Collection strategies and tools
✅ Reporting that highlights stuck cash
✅ Practical advice on high-risk clients

We bring structure where there was chaos—and turn theoretical profits into actual cash.

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🎯 Final Thought

If your receivables process isn’t well-managed, you’re essentially funding your clients’ businesses with your own working capital.

Don’t wait for a crisis.
Get a receivables health check today—and unlock the cash already sitting in your sales ledger.

📩 Reach out to Merzaai Advisory & Accounting at info@merzaai.com or visit www.merzaai.com