Sales are growing. Can your cash schedule support the next order?
The customer is ready to proceed. The price is acceptable, the team knows the product, and the order would open a useful account. Before confirming it, there is still an operating question to settle: when will the company pay for the work, and when will the customer pay the company?
A profitable order can require more cash before collection than the business has available for it. Price, purchasing, delivery, and payment terms belong in the same conversation. Changing one of those conditions may make an otherwise difficult order workable.
At Mirabilys, we would begin by putting the order on a cash schedule alongside the commitments the company has already made. That turns a general concern about cash into a decision with dates and amounts attached.
Consider a hypothetical US equipment supplier evaluating a $300,000 order. All amounts in this example are US dollars. It must pay $150,000 for components in week one and another $60,000 for incremental assembly and delivery in week four. The customer pays the full invoice in week eight. Initially, there is no deposit.
The simplified order contribution is $90,000: $300,000 in sales less $210,000 in specified costs. That is 30% of the selling price. It still needs to support fixed overhead and other business expenses. It is not net profit.
Assume the company has a constant $160,000 cash allocation available for this order until collection. Existing commitments and the operating reserve have already been allowed for. The illustration excludes taxes and assumes no other receipts from this order during that period.
The component payment leaves $10,000 of the allocation available. By week four, cumulative payments reach $210,000. The order therefore needs $50,000 more than its allocation before the customer pays.
That identifies the unresolved condition. The company needs a different payment schedule, a different execution schedule, or another confirmed resource before it can support the commitment as modeled.
Suppose the customer agrees to a 30% deposit, received before the component payment. The deposit brings in $90,000. The maximum cash requirement from the company falls to $120,000: $210,000 of payments less the $90,000 already collected.
Under these assumptions, the order fits within the $160,000 allocation and leaves $40,000 available inside that allocation. The team still needs to validate the costs, component availability, production capacity, and actual receipt of the deposit.
The calculation gives the sales discussion a precise purpose. The deposit supports a defined sequence of purchasing and delivery. It is part of how the order will be performed.
A customer may prefer staged deliveries instead. That can help if payments are received between stages and the purchasing schedule can be separated accordingly. If all components must still be purchased upfront, dividing the invoice alone may do little to reduce the peak requirement.
Supplier terms deserve the same attention. A payment extension counts when it is agreed and reflected in the schedule. A possible concession should remain visibly unconfirmed until the supplier accepts it.
Use one row for each week. Record cash received from the order, cash paid for the order, the cumulative balance, and the cash the company can make available at that date.
Include every incremental payment required to deliver: materials, outside processing, additional labor, freight, and any dedicated equipment or service. Add the applicable taxes and their timing in the real model. Keep assumptions separate from confirmed amounts.
The largest negative cumulative balance shows the peak cash requirement for the order. Compare it with available cash in that same week. In a live business, availability changes as payroll, other customer receipts, and existing commitments pass through the account.
This is also why the opening bank balance is insufficient. Some of that money may already be needed for work the company has promised to complete. The decision sheet must reflect those commitments before allocating cash to the new order.
Have sales, purchasing, and production review the same schedule before the customer receives a firm commitment. Sales should confirm the accepted terms. Purchasing should confirm component availability and payment dates. Production should confirm the capacity required to meet the delivery sequence.
An unresolved difference is useful information. If sales expects staged delivery but purchasing assumes a single shipment, the cash model is not ready. If production requires overtime that is missing from the estimate, the contribution needs to be revised.
Once those points are settled, the customer can receive an offer that connects scope, timing, and payment. The company knows what it has agreed to perform and what must happen before each stage begins.
Several orders can each look manageable and still require the same cash and production capacity in the same week. At that point, the review needs to cover the operating schedule of the business as a whole.
The Sentinel Mandate connects cash and finance, operations, growth, and team. It can help structure that broader examination. The fee is shared during the discovery call. Bring the orders awaiting approval, their purchasing requirements, and the expected collection dates. Those records provide a useful basis for identifying the decision that needs attention.
When does a profitable order become a cash problem?
When cumulative payments exceed the cash the company can dedicate before the customer pays. In the example, $210,000 of payments against a $160,000 allocation leaves $50,000 uncovered until collection. The $90,000 contribution does not solve the timing issue because the customer’s payment is received afterward.
Does a deposit always close the gap?
Only when it is received before the payments it is meant to cover. The 30% deposit in the example works because it lands before the component purchase. A deposit promised for later, or an invoice issued earlier without earlier payment, does not change the schedule.
Who should confirm the schedule before the customer receives an offer?
Sales, purchasing, and production, on the same version. A delivery date without confirmed capacity, or payment terms that differ from what the customer accepted, is a point to settle before the commitment, not after.
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