Case Study: Unlocked $100K for a Jeddah Business | Cash Flow Solutions UAE & KSA | Ghalib Consulting

Case Study: Unlocked $100K for a Jeddah Business | Cash Flow Solutions UAE & KSA | Ghalib Consulting

In the competitive commercial landscape of Jeddah, businesses often find their most significant growth opportunities stifled not by market conditions, but by invisible inefficiencies within their own financial structures. Cash, the lifeblood of any enterprise, can become trapped in working capital, slow-paying receivables, and bloated inventory. This was the exact challenge facing a prominent Jeddah-based retail distributor we’ll call “Al-Nasim Trading.”

Al-Nasim, a family-owned business with over a decade of operation, was experiencing steady top-line growth but found itself perpetually short on cash. Expansion plans were on hold, supplier relationships were strained due to delayed payments, and the owners were financing operations through personal lines of credit. Despite profitable sales, they felt financially constrained.

This case study details how Ghalib Consulting deployed a targeted Financial Planning & Analysis (FP&A) and Working Capital Optimization strategy, identifying and releasing $100,000 in trapped cash within just 90 days, transforming Al-Nasim’s financial health and operational capacity.

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Image: Strategic financial analysis is key to identifying hidden cash flow opportunities.

Part 1: Diagnosing the Cash Trap – The Three-Point Pressure

Our engagement began with a comprehensive diagnostic phase. We conducted deep-dive interviews with the management and a forensic analysis of two years of financial statements, operational data, and process flows. We identified three primary leaks where cash was becoming trapped:

1. The Accounts Receivable (AR) Black Hole (45% of the problem):

• Issue: The average collection period (DSO) was 75 days against industry standards of 45 days for their sector in KSA. Over $350,000 was tied up in receivables. The process was informal—invoicing was delayed, credit terms were not enforced, and there was no systematic follow-up.
• Symptom: “Our customers are loyal, they just pay when they can,” the owners stated, not realizing the massive opportunity cost.

2. Inventory Overstock Glut (35% of the problem):

• Issue: Using a “just-in-case” instead of a “just-in-time” model, Al-Nasim was overstocking slow-moving items based on historical hunches rather than data. Approximately $200,000 of inventory had not turned over in 6 months.
• Symptom: Warehousing costs were creeping up, and capital was frozen in products that weren’t selling.

3. Unoptimized Accounts Payable (AP) & Terms (20% of the problem):

• Issue: While they paid suppliers slowly (straining relationships), they weren’t strategically leveraging payment terms for early payment discounts. They were missing out on 2% discounts for net-10 payments, effectively paying more for their goods.
• Symptom: They had poor credibility with key suppliers, risking priority during supply shortages.

The Bottom Line: Profit was on paper, but operational inefficiencies were silently eroding their liquidity and growth potential.

Part 2: The Ghalib Consulting Prescription – A Targeted 90-Day Action Plan

We presented a clear, phased plan focused on quick wins and sustainable process change.

Phase 1: Rapid Receivables Recovery (Weeks 1-4)

• Implemented a Structured Collections Process: We designed a polite but firm 5-email/3-call collection timeline, moving from a reminder to a firm ultimatum.
• Introduced Incentives for Early Payment: A 1.5% discount for payments within 10 days was introduced for key clients.
• Result: Within 30 days, $45,000 in overdue payments was collected, and the DSO projection dropped to 60 days.

Phase 2: Inventory Rationalization & Rightsizing (Weeks 5-8)

• ABC Analysis Conducted: We categorized inventory into A (high-value, fast-moving), B (moderate), and C (slow-moving) items.
• Liquidation Strategy for “C” Items: We created promotional bundles and offered special discounts to specific customer segments to clear $60,000 of dead stock.
• Revised Reorder Points: Implemented a data-driven inventory management system based on real-time sales velocity.
• Result: Freed up $75,000 in cash (from liquidated stock and reduced new purchases) and cut holding costs by 15%.

Phase 3: Strategic Payables & Vendor Management (Weeks 9-12)

• Vendor Tiering and Renegotiation: We helped Al-Nasim renegotiate terms with their top 5 suppliers, securing early-payment discounts in exchange for more reliable payment schedules.
• AP Process Alignment: Payments were scheduled to optimize cash flow without damaging relationships.
• Result: Generated $5,000 in annual savings from discounts and repaired vital supplier relationships. While this phase conserved rather than released cash, it improved net margins.

Part 3: The $100,000 Transformation – Quantifiable Results

At the end of the 90-day period, the impact was crystal clear in their cash flow statement:

• Released from Receivables: $45,000
• Released from Inventory: $75,000
• Total Cash Unlocked: $120,000 (exceeding the initial target)
• Annual Savings from AP Optimization: $5,000

More importantly, the intangible results were transformative:

1. Restored Growth Funding: The owners halted personal credit use and allocated $80,000 to launch a long-delayed e-commerce channel.
2. Enhanced Financial Control: The new processes (AR, Inventory, AP) became part of their monthly management review.
3. Strengthened Balance Sheet: The business’s liquidity ratios improved significantly, making it more attractive for potential future financing.
4. Owner Peace of Mind: The constant financial pressure lifted, allowing strategic rather than reactive decision-making.

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Image: Unlocking trapped cash provides the fuel for confident business growth and strategic planning.

Conclusion: Is Your Cash Trapped? A Message to UAE & KSA Business Leaders

Al-Nasim’s story is not unique. Many profitable businesses in Jeddah, Riyadh, Dubai, and Abu Dhabi operate with significant amounts of capital locked in operational inefficiencies. The key to unlocking it is not just hard work, but smart, analytical financial management.

You don’t have a cash flow problem; you might have a cash flow visibility and process problem.

Ghalib Consulting specializes in turning financial data into actionable strategies. We help businesses across Saudi Arabia and the UAE:

• Conduct Working Capital Health Audits.
• Implement data-driven Financial Planning & Analysis (FP&A).
• Design processes to optimize cash conversion cycles.

Don’t let your growth be financed by stress. Let it be fueled by your own rediscovered capital.

📞 Ready to Unlock Your Trapped Cash?
Contact Ghalib Consulting Today for a Free Preliminary Assessment.
Email: ghalib@ghalibconsulting.com | Phone (KSA): +966-50-7024644