An invoice is not money
A business can invoice beautifully and still fail. The gap between raising an invoice and banking the cash is where most UAE SMEs get into trouble — and it is almost entirely within their own control.
Profit is an opinion; cash is a fact. A business can invoice beautifully and still fail, because an invoice is not money — it is a request for money, and the gap between the two is where UAE SMEs most often get into trouble.
What we run
- Invoicing discipline — invoices raised the day the work is done or the goods are delivered, with the purchase order reference, the correct entity name and a compliant tax invoice format. A surprising share of late payment is caused by invoices the customer cannot process.
- A debtor ledger you can act from — aged by customer and by invoice, with disputed items flagged separately from simply overdue ones, because they need entirely different handling.
- A chase cycle — a defined sequence of contact before, on and after due date, run consistently rather than when someone remembers. Most collection improvement comes from consistency, not from escalation.
- Customer credit terms — set deliberately, reviewed against payment behaviour, and enforced through order release rather than through argument after delivery.
- Expected credit loss provisioning — IFRS 9 requires a forward-looking allowance, not a write-off when hope runs out. A provision matrix built from your own ageing and loss history is the defensible approach.
- Supplier side too — payment runs scheduled, early-settlement discounts taken where they beat your cost of capital, and creditor days managed rather than drifting.
The numbers that matter
| Metric | Calculation | What it exposes |
|---|---|---|
| Debtor days (DSO) | (Trade receivables ÷ credit sales) × days in period | How long your cash sits with customers |
| Creditor days (DPO) | (Trade payables ÷ purchases) × days in period | Whether you are funding suppliers faster than customers fund you |
| Cash conversion cycle | Stock days + debtor days − creditor days | The number of days of trading you must finance yourself |
| Overdue as % of ledger | Balances past terms ÷ total receivables | Whether the problem is a few accounts or the whole book |
For most SMEs, reducing debtor days by ten is worth more, faster and more certainly than a proportionate increase in sales — it requires no new customers, no marketing spend and no additional cost of delivery. It is also entirely within your own control, which is more than can be said for revenue.
Where an account has stopped being a collection problem and become a legal one, recovery goes to Neo Legal rather than to an accountant sending increasingly firm emails.
Reviewed 18 August 2026 by Ahmed Nabil Selim. UAE tax rates, thresholds and deadlines change — confirm the position for your period before relying on it.
Credit control and receivables — frequently asked questions
It depends far more on your sector and contract terms than on any general benchmark — a retailer paid at the till has almost none, a contractor billing against certification may reasonably run at ninety or more. The useful measure is your own trend against your own stated terms: if terms are thirty days and you are collecting in seventy, the gap is the problem, not the absolute number. Track it monthly and by customer, because the average almost always hides two or three accounts doing most of the damage.
Under IFRS 9 through an expected credit loss model, which is forward-looking rather than triggered by an event. For trade receivables the simplified approach is normally used: a provision matrix applying loss rates to ageing bands, built from your own historical loss experience and adjusted for current and expected conditions. Waiting until a debt is clearly irrecoverable before recognising anything overstates both assets and profit in every earlier period.
UAE VAT legislation provides bad debt relief allowing a supplier to adjust output tax on a supply that has gone unpaid, subject to conditions — broadly that the VAT was accounted for and paid, the consideration has been written off in the accounts, a specified period has elapsed since the supply, and the customer has been notified. Because the conditions and timing are specific and evidence matters, the position should be checked against current requirements for each debt rather than applied as a blanket policy.
Is this your situation?
Tell us how the business is set up and where things currently stand. We will tell you what is required and what it costs to have it handled properly.
Talk to an accountant →