If a large customer delays payment just before payroll, prepare a dated cash forecast immediately. Report actual available funds and credible receipts rather than relying on the invoice total.
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A profitable month does not necessarily provide enough cash on the day obligations fall due.
Verify the receivable’s position
Check the contract, delivery or acceptance evidence, invoice, credit notes and payment terms. Establish whether the customer disputes the amount or merely expects to pay later.
A sales representative’s estimate should be labelled as an estimate. Do not record a promised receipt as money already received.
Example: payment depends on customer acceptance
The invoice is large, but the customer says completion documents are missing. Assign someone to resolve that dependency while finance models the consequences of a further delay.
Prepare the next several weeks of cash movements
- Cleared and genuinely available opening cash.
- Receipts with evidence and confidence assumptions.
- Payroll, tax, rent and other obligations by date.
- Committed funding and actual drawdown conditions.
- Downside scenarios if receipts slip.
- Decision owners and review dates.
Reconcile the forecast to bank and accounting records. ACRA’s director-duty guidance reinforces the importance of reliable accounting records; a forecast should have traceable inputs.
Discuss options before making commitments
Review collection steps, genuine cost deferrals, agreed supplier arrangements and available funding with the appropriate advisers. Do not assume unapproved financing will arrive on time.
Payment-priority and financial-distress questions can require legal advice. A cash spreadsheet alone does not determine which obligations may lawfully be deferred.
Update the plan with actual outcomes
Record receipts and payments daily during the immediate gap. Explain changes to directors and keep unsupported optimism out of the base case.
If the company cannot meet obligations, escalate promptly rather than repeatedly moving dates forward without a viable response.
Does an unpaid invoice count as available cash?
No. Model the actual expected receipt and its uncertainty.
Related practical business guides
Read our company deadline planning guide, accurate decision records checklist and funding delay guide.
Get help with the next step
Email [email protected] or WhatsApp +65 8501 7133. Our accounting team and tax advisers can assist with financial and tax questions. Legal advisers from our associated law firms can assist with contracts, employment matters, business disputes and financial-distress questions.