Business finance is how a company plans and decides when and where to use its money. To see whether the chain can pay suppliers and staff next week, start with cash you can use, lay out the dates receipts and payments are due, and check the lowest balance before approving extra spending.
Accounting records and reconciles balances, invoices and payments. Finance uses those verified records to forecast when money will move and decide how to fund commitments. Inventory and unpaid customer invoices tie up working capital. A receivable can support a spending decision once its timing and likelihood of collection are understood.
Illustration of a finance lead and store manager reviewing documents for the week's payments.
Start with confirmed cash and put each movement on a date
In this example, finance takes a snapshot at 08:00 Monday and forecasts each day's balance at 17:00, Monday through Friday. All figures are in millions of Vietnamese dong. Reconciled bank balances and counted tills total 210. Of that, 30 is restricted, so 180 is available at the cut-off. The 35 that settled the preceding Friday is already in that opening figure. Do not add it again as a receipt this week. A transfer of 20 between two accounts within the forecast scope also leaves the chain's total unchanged, although it changes where the cash sits.
- Expected receipts. A card settlement of 50 is matched to the processor's records and expected on Tuesday. It has not yet reached the bank. A customer has promised to pay an outstanding 70 on Friday. The receipt is awaiting confirmation. Model the two receipts separately.
- Approved payments due. Allow 160 for suppliers on Thursday and 70 in payroll on Friday, for a total of 230. Use the agreed payment terms, outstanding supplier amounts and approved payroll schedule. Keep an invoice date, a contractual due date and a planned payment date distinct.
- Proposed spending. Stock replenishment would take another 40 on Wednesday if newly approved. Leave it out of the base cases. The business wants at least 50 available at each daily close as a working reserve, separate from the 30 of restricted cash already excluded.
For a reference on building the inputs, see Microsoft Learn on liquidity accounts, receivables, payables and payment terms.
Four figures to check before committing more cash
- Coverage at the cut-off = confirmed available cash ÷ approved payments due in the period × 100%. Here, 180 ÷ 230 = 78.26%. Use confirmed balances and approved obligations for the same accounts and week. If nothing is due, the ratio does not apply. The ratio shows coverage at 08:00 and does not tell you which day a shortage might occur.
- Projected closing cash = opening available cash + cumulative receipts assumed for the scenario − cumulative payments in the scenario. Recalculate at each 17:00 cut-off. For example, with neither receipt, Friday's close is 180 − 230 = −50. This is an unfunded amount if every payment goes ahead as scheduled. Treat it as a funding shortfall under the scenario. See the Australian Government's guide to calculating closing cash.
- Lowest projected close = the smallest of the five daily closing balances. Use the dated cash schedule to find the low point and the first day below the reserve. Without future receipts, Thursday already falls below the reserve at 20. Friday is the low point at −50.
- Funding gap against the reserve = the greater of zero and (minimum reserve − lowest projected close). With a reserve of 50, a zero closing balance leaves a gap of 50. Use the daily schedule to see when the business would need funding or a confirmed timing change. Track approved funding and its availability separately.
| Scenario | Thu | Fri |
|---|---|---|
| No future receipts | 20 | −50 |
| Tuesday card only | 70 | 0 |
| Both receipts | 70 | 70 |
| Both + extra spend | 30 | 30 |
The lowest daily closes are −50, 0, 70 and 30, respectively. That puts the reserve gaps at 100, 50, 0 and 20. With both receipts and the proposed purchase, Wednesday closes at 190 (180 + 50 − 40). Thursday falls to 30 after the supplier payment, below the 50 reserve before Friday's promised receipt. Even if both receipts arrive, the extra purchase breaks the reserve. Check the order of Friday's receipt and payroll. A receipt after the bank's payment cut-off arrives too late for the earlier payroll run.
Who acts when the forecast falls below the reserve?
Check the remaining budget after commitments as well as the cash schedule. The budget shows how much the team can approve for a category and period. The cash schedule shows which account can cover the payment on time. If the extra purchase falls within budget, the example still calls for a revised schedule or funding that will be available by the time the supplier payment falls due on Thursday.
- Stores and accounting. Reconcile tills and bank entries. If a card settlement is short or late, keep the variance open with its processor reference and a follow-up date.
- Treasury. Verify when the card proceeds can be used, check the paying account and bank cut-offs, and record confirmation when funds arrive. Keep the original forecast for comparison.
- Accounts receivable and accounts payable. Follow up the Friday promise, match purchase orders, goods receipts and invoices to outstanding balances and supplier terms. If a payment date needs to move, update the schedule only after the supplier agrees and the change is recorded. Keep a promised date separate from the confirmed receipt date.
- The authorized manager. Assign an owner and deadline to each gap. Hold the optional purchase until a revised forecast supports it, or review a funding option that is approved and available before the shortfall. Close the exception when receipts, payments or revised terms have been verified against their source records. Keep forecast and actual amounts separate at Friday's close.
In a Blackwind demo, ask to trace the opening balance, the two expected receipts and the Thursday payment through finance and budgeting and the underlying accounting records. To see how those records begin at the sale, read how ERP connects deliveries, margins and cash. Talk to Blackwind to choose a weekly example and agree on what the demo needs to cover.