It’s a story we see far too often in the UAE: a company is busy, revenue is flowing in, yet the bank account is running dry. One of our recent clients, a manufacturer of custom-specified equipment for government-backed construction projects, found themselves in exactly this position.
Despite generating over AED 7 million in revenue, they had less than AED 200,000 in their bank account.
The Problem
The financial statements looked impressive on the surface, but cash told a different story. Here’s what we uncovered:
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High Overdue Receivables: They had completed large projects for government entities, but many invoices were still unpaid.
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High Inventory Levels: New projects were in progress, and raw materials had already been purchased.
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Liquidity Mismatch: They were profitable on paper, but had no liquidity to cover immediate needs like payroll, supplier payments, and overheads.
This is a classic case of being “asset-rich, cash-poor.”
Our Analysis and Solutions
At Merzaai Advisory & Accounting, we specialize in helping companies unlock trapped cash. For this client, we identified three key interventions:
1. Discounting Overdue Invoices
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Since the unpaid invoices were from government-backed entities, banks considered them low credit risk.
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We helped the client discount their receivables, giving them immediate cash in hand at a small financing cost.
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This improved liquidity without waiting months for collections.
2. Renegotiating Supplier Terms
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We worked with key suppliers to restructure payment agreements.
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The new terms allowed the client to pay 50% upfront and 50% after receiving payment from their customers.
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Some suppliers accepted, improving cash flow alignment with project milestones.
3. Working Capital Financing
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For suppliers who couldn’t agree to revised terms, we helped secure working capital facilities from banks.
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This financing bridged the gap between purchasing raw materials and receiving customer payments.
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It gave the manufacturer the liquidity to keep operations running smoothly.
The Results
Within three months, the client transformed from being strapped for cash to having a stable cash buffer. They could:
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Meet supplier obligations without delays.
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Pay employees and overheads on time.
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Continue taking on new projects confidently.
Most importantly, the business regained control over its cash flow—turning financial stress into growth stability.
Key Takeaways for Businesses
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Revenue ≠ Cash: A full order book doesn’t guarantee liquidity.
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Receivables Are Assets: With the right structures, overdue invoices can be converted into cash.
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Negotiate Smartly: Suppliers are often more flexible than expected if you propose practical solutions.
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Leverage Financing Strategically: The right banking facilities can bridge working capital gaps without straining your balance sheet.
At Merzaai Advisory & Accounting, we help UAE businesses spot these hidden cash flow traps and design practical solutions to unlock liquidity. If your company is growing but struggling with cash in hand, it may not be a profit issue—it could be a working capital issue.
Contact us to learn how we can help your business free up trapped cash and regain financial control.