The Overlooked Advantage: Turning Payables into a Strategic Asset

Payables Are No Longer Passive

For many corporates in Saudi Arabia, accounts payable (AP) has traditionally been treated as a passive function focused on invoice validation, payment scheduling, and cost control. It sits within finance, adjacent to procurement, but rarely takes center stage in boardroom conversations.

That’s changing.

As pressure mounts to improve working capital, localize supply chains, and comply with Vision 2030 mandates, progressive corporates are discovering that AP can be a source of strategic leverage, especially when it comes to managing supplier relationships at scale.

1. The Problem with the Status Quo

In procurement-heavy sectors construction, healthcare, logistics, retail it’s common for corporates to have thousands of SME suppliers, each with varied payment terms, invoice volumes, and credit dependencies.

Delays and inconsistencies in payments aren’t just operational noise they’re financial liabilities:

• Missed early payment discounts
• Risk of cost inflation from financially strained suppliers
• Procurement delays due to supplier churn

Yet, despite the volume and value of payables, most finance teams don’t have a structured way to turn them into a working capital asset.

In a 2023 Deloitte Middle East CFO survey, only 22% of large corporates in the GCC reported having formal supplier financing programs in place.

2. Payables as a Strategic Lever for Working Capital

Corporate finance often emphasizes receivables and inventory when managing liquidity—but payables offer just as much potential.

By enabling early payments to SME suppliers through third-party funding platforms, corporates can:

• Improve Days Payable Outstanding (DPO) without delaying supplier payments
• Free up internal cash by outsourcing supplier liquidity
• Strengthen supplier loyalty and delivery performance

This transforms AP from a cost center to a working capital optimizer, aligned with both treasury goals and operational resilience.

A Himma pilot with a Saudi healthcare group showed a 17% improvement in on-time project delivery after implementing early payment offers to over 1,200 suppliers.

3. Aligning Finance and Procurement: A New Operating Model

Finance teams care about DPO and liquidity buffers. Procurement teams care about supplier availability, continuity, and cost control.

With a supplier finance program embedded into the ERP workflow, both teams can win:

• Finance can manage payables without increasing outflow risk
• Procurement ensures supplier health without renegotiating contracts
• Suppliers get access to working capital without chasing banks

This alignment becomes even more critical in Saudi Arabia, where localization targets, supplier retention, and ESG reporting are converging.

Vision 2030’s Local Content mandates now require large organizations to strengthen their engagement with local SMEs, including financial enablement and faster payments.

4. Early Payment = Negotiation Power

When suppliers know they can receive early payments on approved invoices, corporates gain pricing and negotiation leverage.

Instead of pushing for discounts through elongated payment terms which many SMEs can’t afford corporates can:

• Secure better unit economics on goods and services
• Lock in volume guarantees from financially stable vendors
• Reduce the administrative overhead of renegotiating contracts

In effect, the availability of early payment becomes part of your value proposition as a client not just a financial obligation.

5. Platforms Make It Possible at Scale

Old-school dynamic discounting systems are rigid, manual, and vendor-specific. They rarely scale across hundreds of suppliers.

Modern platforms like Himma are purpose-built for corporates with thousands of SME vendors. They offer:

• Real-time syncing with your ERP to flag approved invoices
• Pre-approved finance offers for suppliers to accept directly
• Transparent reconciliation and contract-level tracking

The corporate pays on its original due date. Suppliers get paid earlier. And no new liabilities are introduced to the corporate balance sheet.

Conclusion: It’s Time to Rethink Payables

In a market where cash flow is king, and supplier continuity is non-negotiable, corporates that treat payables as a strategic tool not a passive process will lead.

By embedding supplier finance into your AP workflows, you're not just improving liquidity. You're building trust, resilience, and long-term value across your supply chain.

Saudi Arabia’s economic diversification demands smarter financial operations and this is one lever few are using, but many will soon adopt.

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