How to plan purchase-order cash flow.

Build the timeline from both sides of the order

Start with the supplier deposit and remaining balance. Record when each amount actually leaves the bank, then add freight, logistics and import-related payments. Put the customer collection on its expected bank date, rather than assuming delivery and payment happen together.

For a domestic order, set irrelevant import costs to zero. For split shipments or multiple customer instalments, use separate dated events in a fuller forecast. One collection date can conceal cash that arrives in several stages.

Worked example: an imported order

Assume opening cash of A$20,000 and a minimum reserve of A$5,000. The order collects A$150,000 after A$120,000 of supplier, freight and assumed import payments. The example isolates this order; other business receipts and costs are not included.

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The A$12,000 import charge is an illustrative input, not a calculated tax liability. The order produces a A$30,000 surplus before other business costs, but cash falls A$105,000 below the chosen reserve before collection.

Use cash amounts for the whole transaction

The import planner accepts AUD amounts supplied by you. It does not convert foreign currencies or calculate duties, GST or concessions. Use your supplier and logistics information to establish the assumptions, and distinguish confirmed charges from estimates.

Build the landed-cost budget line by line: goods, transport, handling and customs-related charges. Check whether storage, insurance, brokerage or other costs are already in a quote before adding them. Treat a possible later refund as a separate cash event, not an automatic reduction in today's payment.

Identify the payment that creates the largest gap

Subtract each dated payment from available opening cash and add collections when they arrive. Compare each balance with your chosen minimum reserve. The deepest balance usually matters more for immediate planning than the final order surplus.

The model groups receipts and payments on the same date. It does not establish that a morning payment can use a receipt clearing that afternoon. Check the actual sequence when a same-day collection is essential.

Test a change before relying on it

Move the customer collection later and check how long the shortfall remains. Separately test a changed supplier schedule, a partial customer deposit or higher logistics costs. Keep each assumption identifiable so an improvement can be traced to an agreed change.

If finance is being considered, compare when funds would become available with the supplier deadlines. Add the quoted fees and repayments to the business forecast. A modelled cash gap does not establish a lender’s advance amount or approval.

A collection delay changes how long cash is tied up

Move the example’s customer receipt from 10 November to 24 November, with no other cash movements. The peak gap remains A$105,000, but the period below the reserve increases from 70 to 84 calendar days, measured from the 1 September deposit. The balance stays at −A$100,000 for an extra 14 days before collection.

A longer wait can create additional costs in the wider business or under a finance agreement. Those costs are not in this isolated example. Add them to a whole-business forecast instead of assuming the unchanged peak order gap means the delay has no effect.

Separate the cash plan from the finance proposal

A purchase-order cash plan measures the schedule you entered. A finance provider must separately assess the transaction, evidence, amount, release conditions and repayment terms. Ask whether any proposed funds can be available before the supplier deadline and what happens if delivery or collection moves.

Before committing, distinguish confirmed order terms from forecast collections. If a supplier payment change or customer deposit would close part of the gap, model it only on the terms actually agreed.

Common questions