Cash flow
A 13-week cash-flow view before discussing facility size
A single requested amount does not show when the gap appears, how long it lasts, or which receipts are expected to close it.
Start with the timeline
The first step is not an annual profit forecast. List opening cash, committed receipts, supplier payments, payroll, tax, and debt service by week. Keep unconfirmed orders in a separate scenario rather than the base case.
Each material cash movement should trace to a contract, invoice, ageing schedule, or repayment plan. If a receipt is marked only as “month-end,” record whether that is contractual, promised by the customer, or based on observed collection delay.
When receipts move back by two weeks
Assume closing cash is HKD 1.8 million in the base case. If HKD 0.9 million of receipts moves back by two weeks, closing cash falls to HKD 0.9 million. The facility discussion should focus on that timed gap, not annual purchasing volume.
| Item | Base case | Delayed receipts |
|---|---|---|
| Opening cash | 2,400,000 | 2,400,000 |
| Customer receipts | 6,800,000 | 5,900,000 |
| Supplier payments | (5,100,000) | (5,100,000) |
| Payroll and overhead | (1,700,000) | (1,700,000) |
| Debt service | (600,000) | (600,000) |
| Closing cash | 1,800,000 | 900,000 |
Turn the gap into reviewable questions
Then test three points: whether the gap is genuinely short term, whether receipts cover principal and interest, and whether the business keeps a minimum cash buffer. If repayment depends on one customer paying on time, customer concentration needs its own review.
Keep base, delayed-receipt, and cost-increase versions in the working file, with the document that triggered each update. That gives changes in size or tenor a traceable basis.
When the forecast can mislead
A 13-week view can be wrong because of cancelled orders, disputed invoices, exchange rates, or seasonality. It exposes assumptions and sets review points; it does not replace credit judgement, legal review, or the company’s own treasury controls.